Obama's Tepid Jobs Proposal Changes the Conversation, but Won't Solve the Problem
Submitted by Illinoisnoki1 on Fri, 09/09/2011 - 15:21
By Bill Bianchi, PDA-Illoinis co-coordinator.
Even some Wall Street reporters and bloggers were calling on the President to deliver a radical jobs proposal, something in the vein of Roosevelt. Unfortunately, President Obama chose to offer up more tax cuts and only a modest investment in jobs.
On the positive side, his American Jobs Act (AJA) might change the conversation in Washington from austerity to job creation, but it’s unlikely to reflate a sagging economy.
Larger than expected, the President’s $447 billion dollar proposal consists of 60% payroll tax cuts and an extension of unemployment compensation. Those cuts are unlikely to make much difference to the millions who are unemployed, underemployed, never employed or about to lose their homes. And those payroll tax reductions--for employee and employer--are particularly worrisome because we’ve seen that tax reductions are extremely difficult to undue.
Only 40% of the proposal, about $175 billion, is money that might actually make it into the pockets of working people. They include $50 billion in infrastructure repairs; $10 billion for an infrastructure bank to help leverage private capital; $30 billion for school modernization and repairs; and $35 billion in aid to states and municipalities for the purposes of rehiring and retaining teachers and first responders. The proposal would also re-authorize federal unemployment benefits for another year.
These are all good initiatives, but way too little to reverse our staggering unemployment and foreclosure problems.
Sam Steen over at Huffington Post says that the most innovative addition in the AJA may be the $15 billion for "Project Rebuild" a program that would leverage private capital to finance the refurbishing of vacant or foreclosed homes.
It’s good that the president takes the focus off austerity for a minute, but he undercuts that by insisting that every new dollar of spending be off-set by budget cuts down the road, a responsibility he passed on to the super commission.
So in typical Obama fashion, the AJA is a complex mix of proposals that offer modest benefits to parts of his base while mollifing business leaders and Republicans, but offer little relief to those in need now, those he will want to vote for him in 2012.
PDA-Illinois calls for a bold public jobs program capable of putting 2-3 million people to work in the next year. Congressman John Conyers and Jan Schakowsky both have offered such bold plans. And instead of balancing spending with more job killing cuts, the President should call for revenue enhancements such as a financial transaction tax and an end to the Bush/Obama era tax cuts.
We are very wary of the payroll tax cuts, which if not restored will leave the Social Security and Medicare trust funds depleted much sooner and thus raise calls for further cuts to those programs and possibly privatizing both.
Mr. President, thanks for changing the dialogue in Washington, but the Wall Street guys were right this time. To put people back to work and ensure your election, you needed to act much more boldly. Think Roosevelt.