The president unveiled his jobs package last night to a joint session of Congress. Here are the main provisions of the $447 billion plan:
-EMPLOYEE TAX CUTS. A deeper payroll tax cut for all workers. Congress in December cut the payroll tax, which raises money for Social Security, from 6.2 percent for every worker to 4.2 percent, for all of 2011. Obama’s proposals would cut that tax even further – to 3.1 percent – for all workers in 2012. The tax applies to earnings up to $106,800. The estimated cost is $175 billion.
- EMPLOYER TAX CUTS. A payroll tax cuts for all business with payrolls up to $5 million. Obama’s proposal would cut the current 6.2 percent share of the payroll tax that employers pay to 3.1 percent. As with employees, that tax applies to annual employee earnings of $106,800. The White House says 98 percent of businesses have payrolls below the $5 million threshold. In addition, Obama proposes that businesses get a full payroll tax holiday for additional wages resulting from new hires or increased payrolls. The estimated cost is $65 billion.
- PUBLIC WORKS. The president proposes spending $30 billion to modernize schools and $50 billion on road and bridge projects. He also calls for an “infrastructure bank” to help raise private sector money to pay for infrastructure improvements and for a program to rehabilitate vacant properties as part of a neighborhood stabilization plan. The estimated total cost of all those programs is $105 billion.
-UNEMPLOYMENT BENEFITS. If approved by Congress, the proposal would continue assistance to millions of people who are receiving extended benefits under emergency unemployment insurance set up during the recession. That program expired in November but Congress renewed it for 2011. If not renewed again, it would expire at the end of this year, leaving about 6 million jobless people at risk of losing benefits. The president also wants to spend extra money on states that help long-term unemployed workers though training programs. One model cited is a Georgia program that lets people receiving unemployment benefits obtain job training at a company at no cost to the employer. The estimated cost is $49 billion.
-LOCAL GOVERNMENT AID. The ailing economy has forced state and local governments to lay off workers. Money that states and municipalities received in the 2009 stimulus package has been running out. Obama proposes spending to guard against layoffs of emergency personnel and teachers. The estimated cost is $35 billion.
-EMPLOYER TAX CREDITS. The president proposes a tax credit of up to $4,000 for businesses that hire workers who have been looking for a job for more than six months. The estimated cost is $8 billion.
-EQUIPMENT DEDUCTION. Wary of imposing a burden on business, Obama wants to continue for one year a tax break for businesses, allowing them to deduct the full value of new equipment. Previously, companies could only deduct 50 percent of the value. The president and Congress in December negotiated that provision into law for 2011, but it is set to expire at the end of this year. The estimated cost is $5 billion.
Lots of reliance on tax cuts. I thought that was a Republican tactic that Democrats scorn in their crusade for new revenue. Isn’t all this help for business what Democrats usually mock as “trickle down economics” and help for the rich? There is, of course, lots of government spending of money that we do not have.
Do you think this will get Americans working again?