You are hereBlogs / John Martin's blog / Why is this a 'Jobs Bill?'

Why is this a 'Jobs Bill?'


By John Martin - Posted on 23 February 2010

Both BigGovernment.com and The Drudge Report are referring to the $15 billion measure that was voted on yesterday as a 'Jobs Bill.'  They put those quotes around those words-- not me.  The implication here is that this is no jobs bill, after all, but just an attempt by Democrats and five misguided Republicans to waste federal money (although calling this federal money doesn't make too much sense, since it's all really the people's money, and the Democrats + five Republicans are just giving a little bit of it back, as they should).

According to The Washington Times, the centerpiece of this legislation is a "$13 billion program allowing companies to avoid paying Social Security taxes for the remainder of 2010 on new hires who have been unemployed for at least 60 days."  The bill also includes a one-year reauthorization of the Highway Trust Fund, a provision allowing companies to write off equipment purchases as business expenses.

Now did I miss something or are Republicans actually upset about a $13-$15 billion tax cut that will benefit small businesses?

From the looks of it, the right is complaining that the legislation is "puny" and won't create enough jobs.  My understanding of current GOP orthodoxy was that lower taxes were always good; they necessarily grow the economy and lead to higher employment.  I guess that's not the case anymore.

Some in the GOP are upset that a bill that had begun life as a $85 billion package was whittled down by liberals in the Senate to its current state.  I still can't see how this makes the resulting $13-$15 billion in lower taxes for American businesses a bad thing.  I think that mostly any tax cut is worth passing.  I certainly thought our Republican leaders still regarded any tax cut as worth passing.  With the Democrats in control of the House, Senate and the Presidency I say we take every opportunity to lower tax rates, no matter how small.

Scott Brown the Conservative was a figment of the right's imagination.  It looks like the right now has woken up to this fact, although it should have already been clear from the "MA" that often accompanies Brown's name.  If we want Republicans to win in Massachusetts, we're going to have to let our party members there go along with Democrats every so often, especially when the up-or-down vote is on a tax cut.

Well, duh, even if most of the ideas are Republican ideas, they can't possibly support it as a group if President Obama and that evil Harry Reid propose it! This bill is a Republican's dream and yet only 5 voted to allow it to proceed.

And how weird is this? Reid went from a $85 billion plan (the bipartisan non-jobs bill filled with goodies for the GOP as I refer to it) to a more modest $15 billion plan. I thought the stimulus package was too big, we should spend less, blah, blah, blah. But when the spending is for them and includes getting rid of the estate tax for the very rich, I guess we can spend like mad.

I do think this bill is a good first step and it looks like Reid has more to add through other smaller packages (which may add up to the bi-partisan bill price tag when all is said and done.) If the Republicans can't even stand by their main platform principles of tax cuts, we are in more trouble than I thought in Washington. 

Here's an article from The Hill on why Reid decided to scrap the bi-partisan give-away bill that had little to do with jobs and what the new bill encompasses.

The Baucus bill, which was estimated at $85 billion, included $31 billion in tax extenders that Reid has decided to leave out. A Senate Democratic leadership aide said Reid decided to drop the tax extenders after Senate Minority Leader Mitch McConnell (R-Ky.) declined to endorse the Baucus package.

Grassley said, "The Majority Leader pulled the rug out from work to build broad-based support for tax relief and other efforts to help the private sector recover from the economic crisis.”

The Democratic leadership aide disputed the notion that Reid had yanked the rug out from under Baucus, noting that Reid has decided to keep the four core provisions of Baucus’s legislation.

The aide said Reid decided to simplify the legislation to “short-circuit potential criticism from one side or the other,” referring to potential Democratic and Republican critics.

Reid’s bill also does not extend unemployment and COBRA benefits that many in both parties want; an aide to the majority leader said those extensions would be handled in a separate bill.

Reid heard loud complaints of dissatisfaction over Baucus’s bill during a Democratic Conference meeting held Thursday afternoon, according to a senator who attended.

The bill now includes four components: tax credits for employers who hire new workers; a provision allowing businesses to write off the cost of capital investments; Build America Bonds, which allow state and local governments to lower their borrowing costs; and a one-year extension of funding for transportation programs in the Surface Transportation Act.

Reid said the Senate would take up the revised jobs bill when lawmakers return to Washington after the Presidents’ Day recess.

Baucus had stuffed the bill with many provisions that Democratic senators thought went beyond the goal of creating jobs, such as $31 billion in extensions to expiring tax provisions, including the research and development tax credit. That and other tax cuts were included to win GOP votes.


Going into Thursday’s meeting, Democrats complained the bill did not focus enough on job creation.


“I would prefer a jobs bill that simply focused on job-creating initiatives, this bill has become something more than that,” said Sen. Byron Dorgan (D-N.D.), who led early negotiations to produce a jobs bill, said before the meeting. “Maybe that’s what has to be done in order to get some bipartisan support.”


Reid said he decided to rewrite the legislation to send a clear message to people struggling financially in the midst of the biggest national recession since the Great Depression.



“The message is so watered-down with people wanting other things in this big package,” said Reid.


the reason this bill is pointless b/c it doesn't foster long term economic growth

when has a social security tax credit which this is mainly ever done that

the 2 biggest taxes that affect economic growth are corporate taxes and personal income taxes. 

that aside - how do you know companies that will use this weren't planning on hiring anyway? 

http://money.cnn.com/2010/02/15/news/economy/obama_carter.fortune/index.htm?section=money_latest

 

Great.  So if these companies were going to hire anyway, now they have to pay a little less because of this credit.

Again, why is this a bad thing. 

so why throw billions away if it was already going to be done?  same terrible thinking that people tried to deem the cash for clunkers a success

how is this a long term job creator? 

I would also ask what about the potential job loss from having to borrow to 'pay' for this?  

 

 

"Throw billions away?"  Since when is letting taxpayers keep more of their money throwing money away?  This is more money that American businesses keep.

By your line of thinking, maybe we should just raise taxes on businesses by $15 billion.  Probably would have zero affect on the nation's job outlook, but could go towards paying down the debt.

 

so spending 30 billion so that some can keep social security taxes is preferable?  i'm sorry that just makes no sense to me, more debt for no effect is never preferable. it didn't work under Carter for a reason and i'm surprised that you don't see it for the gimmick it is.  

Given your statement about raising taxes (though I think tongue in cheek) goes to explain why you are not understanding my point.  Corporate taxes have a huge effect on jobs 

 

 

The reason they are looking at tax cuts and making them such a big part of this package is to appease the Republicans. I'm sure the Democrats would have preferred green job funding or infrastructure projects. Tax cuts are what Republicans live and die by (or so I thought??) and it's probably the only reason they even managed to get a few Republicans on board. Sad, really. So maybe tax cuts aren't the best way to spur jobs. However, I agree with John that there is no harm in giving small business incentives, whether they had already planned to hire or not. They've felt the pinch long enough and deserve the help, rather than always seeing the big corportations get the breaks. So it may mean hiring 10 people rather than 5. Those extra 5 people who now get a job may appeciate this jobs bill more than we understand.

 

And even if these breaks don't result in any more hires (which I doubt), we're obligated to believe that the American business person will spend this extra money wisely.

Wouldn't we rather have individual Americans spend their money, investing it in their businesses and elsewhere, than we having the government hold on to it? 

I swear this whole debate makes me feel like I'm in the Twilight Zone.

John - exactly 'whose' money is being used to pay for this?  It isn't some donation and it isn't free.  It comes at a cost and someone will have to pay that down the line.  The government doesn't have some bank acct drawing interest on 30 billion, that would be China.

Wouldn't it make more sense to enact legislation for long term job creation rather than short term gimmicks designed to curry favor for mid term elections?  But I agree with you about the twilight zone

"President Obama has now held a job forum in Washington, started a Main Street Tour through cities around the country, all devoted to getting feedback from CEOs, small business owners and financial experts on how to create jobs.

His first stop was Allentown, Pennsylvania, where corporate taxes are the highest in the developed world: 35% federal and 9.99% state. But tax rates never got a mention.

Instead the President heard what he had arranged to hear: that a second stimulus bill loaded with job credits and more spending would bring the economy around, especially if the job credits are for so-called "green" jobs. He also wants to extend unemployment insurance again and add health care for the jobless, give more emergency aid to states and cities, and also provide aid to senior citizens.

Among these proposals, the job credit idea is the only one that even pretends to create jobs. If it passes, the government will pay companies some amount toward each new hire. Obama has mentioned $3,000 in the past. Job credits are common at the state level, and they've never worked well. The president's men know this, so they are actually gambling that the economy has turned the corner, and no matter how ineffective job credits are, they will look good if the economy is on the way up anyway.

Instead of focusing on short-term job creation, the President and Congress should be laying the groundwork for long-term growth. If he demanded an answer from candid CEOs, small business owners and financial experts, here's what they'd tell him.

The CEO could truthfully tell the president, "Mr. President, high U.S. business taxes - federal and state - make every country on earth look like a corporate tax haven by comparison with U.S. tax rates. And the U.S. taxes our foreign profits while other nations let their companies earn profits abroad tax-free. We need some relief if we're going to grow and create jobs."

The small business owner—who pays her business taxes on her personal 1040 form—could candidly tell the president that she worries about the coming higher income tax rates. "Mr. President, I'm already paying a 35 percent top tax rate, plus Medicare and state taxes, not to mention property taxes and several others. If all three of the big tax hikes Congress is planning are enacted—the income tax hike of 4.6 percent, the health care surtax of 5.4 percent, and the war surtax—entrepreneurs like me could face tax rates of 60 percent. I can't be hiring people with such an uncertain tax climate."

The financial expert could honestly explain how high our taxes on dividends are. "Mr. President, the U.S. now has the 3rd highest total tax on dividends among OECD nations. Just five years ago, our rate was 8th highest. If the House health reform plan passes, our dividend tax will be the world's highest in 2011."

These statistics should worry the president and his economic team as they consider policies for growing the economy over the long term. The very taxes that the U.S. ranks worst in are the most harmful for long-term economic growth according to the study "Tax and Economic Growth," published in July 2008 by economists at the OECD."

 

 

http://www.taxfoundation.org/research/show/25603.html

Okay...I admit to not being up to par recently as far as being really informed goes....but from the little I know about this, I have a couple of things to say/ask,

This bill will help small businesses much more than huge corporations, right?  It is the small business owner that may see his business increasing slightly with the slow turn around in the economy and could stand to hire another person or two.  It is the small business owner that might be able to justify the salary of another employee, but cannot also afford to pay the business share of the SS taxes too...or would have to lower the salary/wage of the worker. (I have a friend in this situation...who has already given up providing insurance for her employess.) 

Won't some of the lost income be made up by the newly employed paying taxes on their income?  And won't they still have to pay the worker's share of SS tax?

Anything that helps small business, who happens to be the largest employer in the nation, puts people to work and takes them off the unemployment rolls (which also saves money), increases income tax revenue on the state and federal levels, for a limited time tax break for the business owner is a bad thing???  How???

Mary, I wonder if you would feel differently if it were a tax break of some kind for big business?  And where do you get the $30 billion figure ?

Gimmick or not, 13 Republicans now are on board.

What caused these additional 7 to come around? 

What caused these additional 7 to come around?

My guess: the typical political rationale -- intense dread of the PR when their next opponent runs TV ads saying, "(S)He was against the jobs bill." 

 

Now will it pass the House? I know they wanted bigger...but I'm sure it will get through.

Senate approves tax breaks for new hires: The 70-28 vote sends the bill back to the House, which passed a far more costly measure in December. Many in the House consider the Senate bill too puny ($35 billion), but they may simply adopt it and send it to Obama in order to get a win. Democratic leaders promise more so-called jobs bills are on the way.

The new hiring tax credit could spur about 250,000 new jobs, according to economist Mark Zandi of Moody's Economy.com.

Republicans voting Yea.

State unemployment rate next to their names:

Alexander (R-TN) -- 10.9%
Bond (R-MO) -- 9.6%
Brown (R-MA) -- 9.4%
Burr (R-NC) -- 11.2%
Cochran (R-MS) -- 10.6%
Collins (R-ME) -- 8.3%
Hatch (R-UT) -- 6.7%
Inhofe (R-OK) -- 6.6%
LeMieux (R-FL) -- 11.8%
Murkowski (R-AK) -- 7.7%
Snowe (R-ME) -- 8.3%
Voinovich (R-OH) -- 10.9%
Wicker (R-MS) -- 10.6%

how many up for reelection? 

 

 

 The fact throughout history is that whenever government dominates the economic affairs of its citizenry, a free society is eroded, then destroyed, and a minority government ensues. Personal liberty without economic liberty is an absolute contradiction; the one cannot exist without the other.
William E. Simon

 

 

 

Follow RFO:

TwitterCafe PressFacebook

RSS

 

 

RFO Gear

Subscribe to General RFO Newsletter

General news and announcements for republicansforobama.org. We will never share or sell your email address.