Obama to propose $300 billion to jump-start jobs

[Omaha Steve]

Source: AP-Excite

By JIM KUHNHENN and DAVID ESPO

WASHINGTON (AP) - The economy weak and the public seething, President Barack Obama is expected to propose $300 billion in tax cuts and federal spending Thursday night to get Americans working again. Republicans offered Tuesday to compromise with him on jobs - but also assailed his plans in advance of his prime-time speech.

In effect, Obama will be hitting cleanup on a shortened holiday week, with Republican White House contender Mitt Romney releasing his jobs proposals on Tuesday and front-running Texas Gov. Rick Perry hoping to join his presidential rivals Wednesday evening on a nationally televised debate stage for the first time.

Lawmakers began returning to the Capitol to tackle legislation on jobs and federal deficits in an unforgiving political season spiced by the 2012 presidential campaign.

Adding to the mix: A bipartisan congressional committee is slated to hold its first public meeting on Thursday as it embarks on a quest for deficit cuts of $1.2 trillion or more over a decade. If there is no agreement, automatic spending cuts will take effect, a prospect that lawmakers in both parties have said they would like to avoid.

Read more: http://apnews.excite.com/article/20110907/D9PJCK6G0.html

---

Rep. John Larsen, Conn., center, speaks about creating jobs, as House Democratic Leader Nancy Pelosi, D-Calif., left, and Rep. Xavier Becerra, D-Calif. listen on Capitol Hill, in Washington, Tuesday, Sept. 6, 2011. (AP Photo/Cliff Owen)

[aquart]

1. TAX FUCKING CUTS?

[customerserviceguy]

2. I can see a carrot and stick approach

A raise in business taxes, coupled with a tax credit for hiring the unemployed, especially the long-term unemployed. That targets the break to genuine job creators, rather than simply scattering money throughout the economy with a FICA tax cut, and just hoping that jobs arise from it.

[RUMMYisFROSTED]

52. I can see it, too.

But that's nothing near what we're talking about.

[reformist2]

53. $170 B of that is a continuation of the Social Security tax cut/ defunding.

Continuing that won't create jobs - it'll just prevent the loss of new ones.

So that leaves $130 B, half of which are tax breaks for businesses. Only a puny $50 B for actual public works.

Ugh.

[a simple pattern]

62. Barack W. Obama

NFM

[PSPS]

3. "The economy weak and the public seething"

The economy weak and the public seething, President Barack Obama is expected to propose $300 billion in tax cuts and federal spending Thursday night to get Americans working again.

That sentence should have the word "economy" replaced with "president." $300 billion, most of which will likely be tax cuts or, even worse, more reduction in FICA.

There are 14 million unemployed using the cooked BLS statistics. (25 million in the U-6 category which includes involuntary part-timers and discouraged/given up.)

This won't get better until there's direct federal hiring like a WPA program.

Obummer.

[DJ13]

4. $300b to solve the jobs crisis is like me thinking I can buy a new car for $300

It aint gonna happen.

[maddezmom]

5. kick

[alp227]

6. Existing Tax Cut Is Seen as Best Hope for Obama Jobs Plan

Source: The New York Times

WASHINGTON — The centerpiece of the job creation package that President Obama plans to announce on Thursday — payroll tax relief for workers and likely their employers — is neither his first policy choice nor that of many economists. But it is the one that they figure has the best chance of getting Republicans’ support.

Mr. Obama has signaled that he will propose to extend for another year a reduction of two percentage points in the 6.2 percent Social Security payroll tax that employees pay, which means about $1,000 more for the average household. And he is considering a proposal to expand the tax relief to employers’ share.

In his prime-time address to a joint session of Congress, Mr. Obama is expected to call for a package totaling several hundred billion dollars that would also extend other business tax cuts, put federal dollars into building and repairing roads, rails, airports, schools and other infrastructure projects, and provide aid to states to avert more layoffs of teachers.

But the single biggest stimulus measure he will propose is likely to be temporary payroll tax relief. If the current tax cut, due to expire at the end of the year, is expanded next year to employers as well as employees, it would pump roughly $200 billion into the economy, with the aim of stimulating much-needed demand for goods and services from consumers and businesses and, additionally, of giving companies an incentive to hire.

Read more: http://www.nytimes.com/2011/09/07/us/politics/07obama.html

[ixion]

7. if it's existing now and it's not working, why would extending it

make it any better?

Yet another disappointment.

[PSPS]

9. It further hastens the destruction of Social Security. In that way, it "works better."

Obummer.

[reformist2]

69. This worries me. A LOT.

[gateley]

12. What would you suggest he propose that -- and this is key --

will get the Republican votes to enact it?

It would be MORE disappointing if the tax cuts weren't extended, IMO. Not my first choice, either -- far from it -- but it will help people and hopefully allow the employers to keep more employed until we get some REAL changes going.

[russspeakeasy]

20. It DOES NOT MATTER what he proposes. The repugs

:evilgrin: will not support it. So why not propose what his (former) base can get behind ?

[EFerrari]

21. Precisely. n/t

[gateley]

23. Well that might have some merit. They'll turn it around, though --

"he didn't give us anything we could support" but they do that no matter what! So yeah, I like it! :7

[sofa king]

66. What if it doesn't matter that the Republicans will oppose it?

What if the President has already snookered the Republicans into creating a funding-loop that the President can use to create and fund his own programs?

Then ask yourself what happens if the programs the President creates without a single Republican vote actually work? Who's gonna get whipped in 2012 then?

[Yo_Mama]

60. First, he's doubling down - he's proposing to extend the FICA tax cut to employers

Second, he's screwing SS recipients in the future. Yeah, in theory the general fund pays the money back to the SS trust fund, but you know what? The only thing in the Trust fund are promises to pay from the general fund. And later on, if they can't borrow, they won't be able to pay benefits. So every 100 billion of new debt we rack up probably is mostly going to come out of some poor retiree's pocket in the future.

Third, it's not going to work. We know that because it HASN'T worked, and the employee side was more likely to work. It would have if the tax cut hadn't really been targeted to the higher earners; the lower paid workers would have spent the money if they had received it.

Any temporary measure like this won't get businesses to hire. They'll hire if they need to hire because they have business to transact, but they are very unlikely to hire just because they suddenly have more money. A lot of businesses will probably use the money to pay down some debt or buy some equipment they can expense (also a provision) to further cut their federal taxes next year, but they will only hire if they really have the business need and if they believe they'll still be able to afford the new employee(s) after the year is up, and the tax cut expires. So what will happen is that a lot of small business owners will buy themselves new company cars. That will help the economy somewhat, but it won't help most unemployed people.

Given the current environment, most businesses are pretty leery and are extremely unlikely to hire.

What he needs to do is spend the 200 billion the FICA tax cuts will cost directly on creating new work. Infrastructure spending is good, and at this stage, a public jobs program would be appropriate. It's time for someone to worry about the 99rs, and oh, yeah, since June the 15-26 weeks unemployed number seems to have increased by about 300K, so maybe it's time to actually create some jobs. Jobs, yeah, that will help.

It's not like this has never been done before. There's a very long history of public works programs.

[Doctor_J]

13. It seems politically suicidal

maybe the president doesn't want to be re-elected, and rather than drop out and let someone with some NEW ideas give it a try, he's going to continue with the failed ideas that have completely ruined his presidency, knowing he'll get voted out. We're 10 YEARS into these stupid tax cuts, the result of which has been a net loss of jobs.

[lonestarnot]

8. So sell out Social Security through the back door then. Yeah, we get it.

[Vincardog]

10. BO needs to quit worrying what can pass the GOP logjam and propose what WILL HELP and point out the

REPUGNANT REPUBLICANS will be at fault if the plan does not pass.
BO needs to quit compromising every rational position away BEFORE the negotiation START.

[gateley]

14. So he does that and they STILL don't support it, how does that

help?

What can we put in place without the Republican votes? What???

[Vincardog]

16. WE can point at their obstruction as the cause of OUR problems and let the voters do the right thing

Short term thinking does not help. STANDING up for PRINCIPLES does a lot more good.

[gateley]

18. In theory I agree, but all the majority of people know is that

they're hurting for money, and "the President didn't help" and he'll take the fall. That's my take on it, though. But I STRONGLY agree that we need to show, point by point, how they've blocked us and I've been yammering about that for a long time. Hasn't happened yet, can't count on it happening now. :(

[Vincardog]

19. When BO stops blaming CONGRESS and starts blaming the GOP I will quit saying he is the bet GOP

president ever.

[gateley]

24. Do you mean all Republicans, or are you making a distinction

between the House and Senate?

[Vincardog]

30. NO

[gateley]

33. No to which one? nt

[Vincardog]

51. I mean all Republicans

[quakerboy]

25. And that is where we will be

whether the president proposes nationalizing the whole banking industry or ending all corporate taxes completely. Either way people will be hurting for money, and either way the other side will yammer about the president not helping, and try to make him take the fall.

So why not at least propose something that makes one side happy, that you can at least legitimately argue would help. As opposed to things proven ineffectual.

[Mojorabbit]

11. We have a small business

and a payroll tax cut will not stimulate us to hire. We will hire if we have an increase in customers. They keep doing the same thing over and over. Tax cuts for over a decade and it does not work. This will underfund the SS system and make it ripe for "tweaking" as it will be in "crisis" due to a decrease in funding down the road.

[gateley]

15. Will it help you to keep current employees? Ideally, it will

help workers have more money to spend, right?

[FrenchieCat]

27. I do accounting for small businesses; we're talking Mom and pop....

and a cut in payroll taxes will allow them to hire, even if it's just one person.

I also generate payrolls! In fact, I just did a small one today; 18 employees including the owners. The FICA taxes for the employees were $511.71 less than what the employers have to pay on the same payroll. Multiply that difference by 26 (as there are 26 pay periods in a bi-weekly payroll), and that's $13,304.46 annually. Mind you, this is a tiny mom/pop restaurant that pays minimum wage, and the workers also declare cash and credit card tips....so $13,304.46 may be enough for almost one employee to be hired. The point is that is real money even for the tiniest small business.

[gateley]

35. Good - I'm glad it helps! I personally don't mind this kind of

a tax cut if it can help us over the hump!

[zogofzorkon]

37. Or more likely the 13k will go in the owners pockets. Just wondering

how much of the cash business the owners declare compared to the workers. That 15 bucks or so per employee per week of FICA tax burden is better looked at by seeing how much cash money each employee generates for mom & pop. You can bet its way more than 511 dollars from each employee that mom is putting in the bank every pay period, thats a pretty good payoff on 15 bucks.

[KansDem]

54. Why hire if there's no increase in business?

I'm constantly amazed when "small business owners" appear at rallies with signs that read "Cut my taxes and I'll hire more employees" or something similar. I thought is "Really? Even if you business remains stagnant? You're going to hire more?"

Wouldn't a small-business owner simply "invest" that cut in payroll taxes in their 401K or some other retirement plan? Maybe put in a tax-haven overseas?

Unless there's no plan to put Americans back to work which would put more money into their hands, then there's no increase in consuming which would require small businesses to hire. Increase in consuming means an increase in business...

Is there something I'm missing here? :shrug:

[Yo_Mama]

59. No, you've got reality pegged.

The FICA tax cut on employees stood more chance of causing more hiring, but it was a bad move because most of the money actually goes to higher paid employees. In fact, the lowest wage earners (approximately 40% of the workforce) got no cut or a federal tax increase, because the FICA tax cut replaced the MWP, and almost all the lower paid workers got all $400 of that. Any worker who doesn't earn at least 20K actually lost money.

So that's why the FICA tax cut for employees was pretty damned ineffective - if you want to stimulate the economy with tax cuts, make sure to get the money in the pockets of those who are very tight on money and will spend it. In my family, it was pretty much saved. Sure, when you get $2,000 in federal tax cuts in a year it's nice (worker earning 100K), but truth to be told, workers at that level are less financially pressured and are more likely to be worrying about the future retirements, so a lot of them just saved it.

Obama isn't picking the right advisers and he isn't learning from his mistakes. This is doubling down on a bad idea.

If Obama simply went back to the MWP it would work a lot better! We're not going to stimulate this economy by giving large tax breaks to people who are already doing pretty damned well for themselves - we need to funnel money in at a lower level in the economy.

[Yo_Mama]

58. Yes, but I don't think it will cause many hires

The reason is that it is temporary, and most businesses don't want to hire and lay off.

Will it push a few over to hire? Sure. But not that many, and if they do hire, they'll probably hire temps! A lot of small business owners are watching their unemployment record very carefully, because if they lay off someone it may push them into a higher unemployment tax bracket. This is one reason for not hiring if they are not sure that they'll be able to keep the employee. This is not at all a minor concern for most employers, especially small employers. The recent problems have caused pretty darned high maximum rates (based on experience). Look at the current state table from DOL:
http://workforcesecurity.doleta.gov/unemploy/content/sigpros/2010-2019/January2011.pdf

For most states, the difference between the minimum and maximum rate based on layoff experience is around 5-6%, and in some it is as high as 8 or 9%. So hiring someone and then laying the person off can be a very expensive proposition; a lot of employers are giving no raises to some of their employees hoping they will leave on their own. It simply costs too much to fire them. The experience rating affects whatever portion of your entire payroll is subject to state unemployment tax, so a change in experience rating can be very costly indeed.

Most of this money won't cause hiring. Our jobs problem is severe enough that if you are going to spend this money, you have to do it in a way that will directly produce hiring. Further, once more, the bulk of the money will go to the higher earners in one way or another.

I'll be honest - with a one-year time frame, I don't think most business owners will even use the money to give raises. If anything, they may hand out some bonuses to employees they want to keep. That will be a help, but it's no game-changer. You don't run a business on the conditions for one year at a time - you have to plan ahead.

I think Obama needs new advisers with a lot more experience in the real world. He keeps going for profs who are very isolated from conditions on the ground, and he's not learning from his mistakes.

A better way to spend the money would be to provide some funding for the states to cut the higher unemployment tax rates for a period of, say, three years. That would change things for many potential employers. They'd be more apt to hire workers without being absolutely sure they could keep them.

[Mojorabbit]

32. We haven't planned to let our workers go

We have just the right amt of workers for the amt of people coming in. It seems that the assumption is that with a tax cut we will go out and hire a new employee but we don't need an new employee unless we have a pretty decent increase in business.

[gateley]

34. I've heard of people having to let people go because of the taxes,

just curious if you found the cuts helpful at all if you had been faced with that.

[Mojorabbit]

36. It is possible that others have had that problem

but luckily we have not. :)
I so wish for a huge infrastructure package. I think that would help so much. We know so many construction workers who are hanging on by their fingernails.

[Hell Hath No Fury]

49. The same here --

The small business I work with has been struggling for years to keep its head above water, and had to lay off two workers for the first time in its history. A tax cut will do ZILCH to help this company, nada -- there is not enough business to warrant hiring a new employee, simple as that.

You know what would help this company? Doing something about the health insurance costs. Coverage is currently 5k a month for Kaiser -- Medicare For All would have been real, direct help for many businesses.

[Angry Dragon]

17. If it works the same way as now then the cuts will just be paid from

the general fund
SS will still be funded just moving money around
It was stupid in December, it is stupid now
And I agree with you on the tweaking

[OnlinePoker]

22. I'm curious

How will the 2% increase in payroll taxes that come in at the expiration of the cut effect your bottom line? Will it mean a reduction in employees, or will you have to bite the extra cost while retaining your current staff?

[Mojorabbit]

31. We will retain our small staff as they have been with us

for a couple of decades no matter what.

[Name removed]

26. Deleted message

Message removed by moderator. Click here to review the message board rules.

[marasinghe]

28. all this time i figured the modus operandi was 'sellout'. i'm starting to lean towards 'stupid'. n/t

[on point]

29. Let's see, 2.5 trillion in cash? Perhaps another 500 billion will make them invest

This tax cut sickness has to end. It is part of the failed delusional nonsense called supply side economics, otherwise known as 'tinkle down'.

It is demand side STUPID!

In vest in infrastructure.

TAX retained earnings!!

Lower overnight fed rate so that it is negative (therefore better to invest it than sit on it)

SO many other possibilities that might work,

But tax cuts are a PROVEN failure!!

[Hissyspit]

38. Obama to Propose $300 Billion Jobs Package: Report

Source: Reuters

Obama to propose $300 billion jobs package: report

WASHINGTON | Tue Sep 6, 2011 10:46pm EDT

(Reuters) - President Barack Obama, facing waning confidence among Americans in his economic stewardship, plans to lay out a $300 billion job-creation package on Thursday, CNN reported, citing Democratic sources.

The proposed new spending, to be announced by Obama in a nationally televised speech to Congress, would be offset by budget cuts, the report said, signaling that the Democratic president hopes to mollify the concerns of Republican fiscal hawks resistant to his jobs ideas.

There was no immediate comment from the White House.

Obama's aides have refused to go public with the estimated cost of Obama's package or provide many specifics in advance, except to say that the proposals will have a "quick and positive" impact on boosting jobs at a time of stubbornly high U.S. unemployment.

Read more: http://www.reuters.com/article/2011/09/07/us-obama-jobs-idUSTRE78176520110907

[madrchsod]

39. we`ll have to wait and see.....

[drm604]

40. That would be great if the Republicans would actually allow it.

They don't want jobs or economic recovery because that would help Obama.

[TomCADem]

41. It Seems Like The $300 Billion Does Not Include The Infrastructure Spending Democrats...

...Have been repeatedly demanding, but which Republicans are sitting on.

[Lorien]

42. The devil is in the details

A WPA type program would be ideal, with cuts coming from the Pentagon...but that's wishful thinking I suspect. Let's just hope that the money isn't funneled into corporate hands with cuts coming from essential programs.

[Lionessa]

43. Not exactly, if reports are correct. More than half seems to be tax cuts,...again.

[Kablooie]

44. Doesn't he still have to get GLOP approval? Forget it. Its nothing but empty talk.

I do not believe the GLOP would ever let him get away with a plan that had a chance of succeeding.

Might as well stitck your fingers in your ears and sing Trololololol.

http://trololololololololololo.com/

[lib2DaBone]

45. $300 Billion is what we spend in Afghanistan in 6 months...

[coyote]

46. It's not even half of the 750 billion the bankers got, but

it's a start.

[blank space]

47. Um,

riiiight, election mode, lets create some short term Jobs - ...clean up crew for Irene and the Fires no doubt, perfect campaign fodder.

So, let me see - you have to cut 1.5 TRILLION and you think you are going to slip 300 billion, plus buy treasuries, and this is going to come from where ? The sale of short term bonds......you must think people are stuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuupid !


Good luck with this, the recent announcement from Nigeria et al that they are moving to the Yuan is not a sign that people are going to buy SHORT term US treasury bonds when you economy is tanking and you have JUST been downgraded. In fact - it will mean an INCREASE in yields.


If you can just magically wave your fucking magic wand and spend 300 billion on jobs then what the FUCK have you been doing for 4 years Barrack ?

Finally - I can not wait to see how the military reacts to slashing their budget - not that I don't know already - get prepared for a very, very serious war somewhere in the middle east - Iran.

[BumRushDaShow]

48. "If you can just magically wave your fucking magic wand.."

What kind of nonsense is this? Congress, not the President controls the purse strings and makes the decision on what will happen with any proposals from the Executive branch. More specifically, money bills must originate from the (repuke) House. But DU doesn't know how bills become a law. :crazy:

[Blue_Tires]

50. The corporations are NOT hiring! There is no reason for them to...

When they have outsourced/insourced so many jobs to cheap workers, and gotten a smaller American workforce to produce the same amount of work...That's why they have been hoarding mountains of cash, ready to dump it into anti-environment and anti-labor campaigns -- They have leveraged this crisis to the hilt, which is also why previously untouchable topics (social security, medicare, etc) are in play...

[and-justice-for-all]

55. How fucking hard is it??

A national works program for infrastucture revitalization would be the right thing to do.

[Telly Savalas]

57. How many votes are there in the House for such a policy?

That's what makes it hard.

[EFerrari]

65. How hard would it be for Obama to get those votes if he wanted them?

The public wants a jobs program. In fact, his re-election probably hinges on jobs.

[Doctor_J]

68. If candidate Obama would reappear and rally the 70 million who voted for him

it would get done. But that guy died on November 8 2008

[bamacrat]

56. He's losing me...

Why does everything have to start in the future, why not now. If you are going to raise the taxes on the rich, do it now, not in 2014 or 2016. Also a 12 month payroll tax holiday, I know it wasn't part of Obama's deal, but wouldn't that increase our debt by a lot because we will just have to borrow to make up for that massive of a gap...or just eliminate the Defense Department for a year and reinvest in education and infrastructure.

[Poll_Blind]

64. You're missing the point: If it happens "in the future" then it can be reversed.

If it happens now, why, it has to happen now. Why would the President want that?

:shrug:

PB

[buckrogers1965]

61. $300 billion in small business loans

Would do a lot of good in creating jobs for Americans. Giving $50,000 loans to 6 million Americans would easily employee 18 million people as they hire a couple of people each to start their businesses. Not to mention how many jobs would be created by this money circulating in the local economies all over the country.

But giving the money to the current corporations will only pay to ship more of our jobs overseas.

[MrSlayer]

63. Not even close to what is needed.

The asshole fascists are never going to agree to anything he wants so he should go big. Real big. And then call them out for not wanting to help the country.

[panzerfaust]

67. "Obama is expected to propose $300 billion in tax cuts and federal spending"

Yep.

Tax cuts: The Republican answer to everything.

Too bad the Democrats did not win the last presidential election.



Yes! We Should Have.