Obama reveals American Jobs Act

On Thursday night President Barack Obama revealed the details of The American Jobs Act, a $447 billion stimulus bill, to a joint session of congress and the country. Over half the bill is tax cuts with the remaining going towards targeted areas of spending. The main areas of the bill include:

  • Infrastructure Bank –  initially to be funded by government, it will offer loans for private-sector infrastructure projects. The bank should not need additional government funding as the interest paid on the loans should make it self-sufficient.
  • $50 billion for transportation improvements including roads and mass transit.
  • Payroll tax cuts – extend and expand the current break on payroll taxes, which are normally 6.2% and this year have been 4.2%. In this plan they would be reduced to 3.1% for the next year. In addition, the payroll tax that businesses pay would also be cut to 3.1%.
  • Tax cuts for companies that hire workers who have been unemployed for more than six months.
  • Extend unemployment benefits.
  • $25 billion to improve and modernize 35,000 public schools.
  • $35 billion for teaching and first responder jobs.

President Obama stated that the bill would be paid for by raising the target for spending cuts for the new super committee from $1.5 trillion to $2 trillion.

My analysis:

I believe Obama presented several sound ideas like the infrastructure bank and transportation improvements. I was dismayed that over half the bill is in the form of more tax cuts which clearly have shown to have little stimulating effect on the economy over the past 10 years. A strong point in the speech was the statement that the American people can’t wait 14 months until the next election and that the economy requires action now. Another strong point was when Obama spoke about the notion to “dismantle government and refund everyone’s money” as way for the country to prosper. I was struck by this statement as I’ve had discussions with others about this very notion. I was happy that he used the word “dismantle” as that is the best way to describe the contempt that some on the Right have towards government.

My grade on the speech itself is a B+. My grade on the substance of the bill is a C+. It was bigger than many expected including myself but I believe it is far from what is required to get the economy going, particularly because much of it is in the form of tax cuts. The catchphrase of the night was “pass this bill” and it’s other variants.

Read the full transcript of the speech or watch it here:

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Economy

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  • Robert Reich’s sentiments on Obama’s jobs speech.

    http://robertreich.org/post/9984121331

    I couldn’t agree more.

  • It was a beginning, but that may be all. With the quagmire in Congress, I am not certain that anything but a watered-down Bill and few taxes, if any, on the wealthy can accomplish what this country needs. We need prompt and decisive action. We need the wealthy to contribute their fair share. Without a genuine combined effort of Congress, hopes are dim that help is on the way.

    • I do not expect to see much if anything passed by this congress. It’s ridiculous because even if it didn’t create one job (obviously it would create jobs) it would still be a good idea to spend the money needed to fix and upgrade this country’s infrastructure and schools. I’ve heard some arguments that the jobs this would create are temporary. So what? They are still jobs and this is still stuff that needs to be done regardless.