More on the job bill from Ezra Klein
Members of the U.S. Congress applaud as U.S. President Barack Obama addresses a Joint Session at the U.S. Capitol.(Chip Somodevilla -GETTY IMAGES)
“Pass this jobs bill,” said President Obama. Then he said it again. Then he said it again. And again. All in all, he asked Congress to “pass this jobs bill,” or some variant thereof, 12 times during Thursday’s jobs speech.
That got to the essential truth behind the speech: all the president can do is ask Congress to pass his bill. The only direct leverage he has is his ability to make the ideas popular and their refusal unpopular. He can’t make them pass the bill. He can’t pass it himself. He can’t use an executive order. He can propose ideas and use the bully pulpit to force them onto the agenda. After that, it’s up to Congress.
The proposal itself is called “The American Jobs Act” and amounts to about $450 billion worth of ideas that have, at other times, commanded a bipartisan consensus.
- It completely eliminates the payroll tax for workers, which amount to a $175 billion tax break, and cuts it in half for businesses until they reach the $5 million mark on their payrolls, at a cost of $65 billion. The idea there is to target the tax cut to struggling small businesses, rather than the cash-rich large businesses. It also extends the credit allowing businesses to expense 100 percent of their investments through 2012, which the White House predicts will cost $5 billion.
- It offers $35 billion in aid to states and cities to prevent teacher layoffs, and earmarks $25 billion for investments in school infrastructure.
- It sets aside $50 billion for investments in transportation infrastructure, $15 billion for investments in vacant or foreclosed properties, and $10 billion for an infrastructure bank. It also makes mention of a program to “deploy high-speed wireless services to at least 98 percent of Americans,” but it doesn’t offer many details on that program.
- It provides $49 billion to extend expanded unemployment insurance benefits. $8 billion for a new tax credit to encourage businesses to hire the long-term unemployed, and $5 billion for a new program aimed at supporting part-time and summer jobs for youth and job training for the unemployed.
- It also encourages the Federal Housing Finance Authority to make it easier for underwater homeowners to refinance their mortgages.
If all of that could be spent out in 2012 -- a big if, but given the reliance on tax cuts and state and local aid, much of it could certainly hit before the year’s end -- it would be bigger, in annual terms, than the Recovery Act. The White House also promises the entire proposal will be paid for, and the specific offsets will be released next week.
The plan, taken as a whole, attempts to include every single theory of how to address the jobs crisis. If you believe we need more direct spending, you’ve got the infrastructure component. More tax cuts? The plan has $250 billion in tax cuts. More help for the unemployed? Yep. More deficit reduction? Next week, the White House will release a package that offsets this plan and reduces the deficit by more than $1.5 trillion on top of that.
Of course, in much the same way that everyone can find something to like in this plan, everyone can find something to dislike. If you believe tax cuts are ineffective during a demand-driven crisis, the plan spends a lot of money on tax cuts. If you don’t believe in infrastructure spending, there’s plenty of it in here to offend you. If government spending goes against your moral code, well, the government is going to spend money. And next week, when the Obama administration releases its deficit-reduction ideas, liberals are going to be a lot less enthusiastic than they are tonight.
So the question for members of Congress ends up being simple: do you want to focus on the things you do like and compromise on the things you don’t like in order to get some action on jobs and deficit reduction? Or do you want to focus on the things you don’t like and abandon the things you do like in order to kill the legislation? All Obama can do is ask. Now it’s up to Congress to answer.
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