Over the course of the last 6 weeks, our President has been telling everyone who would listen about his upcoming "jobs" plan that would finally revitalize our sagging economy. Throughout his campaign-style monster-bus tour through the Midwest, President Obama told the American people that following his 10 day vacation in Martha's Vineyard, he would be presenting Congress a series of steps that would get employers hiring again, not just to stimulate. Not lost on some was the similarity to his 2010 pre-Vineyard vacation message as well as the irony of telling the country he would promote job growth after taking a vacation.
Well after several weeks playing several rounds of golf followed by some last-minute schedule posturing with Republicans and the NFL, we finally got to hear what the President would be proposing. More infrastructure spending and public teacher funding relief. More payroll tax cuts. Another extension of unemployed benefits. These were all large components of the Stimulus of 2009, which has already horribly failed to achieve its objective of sub-8% unemployment. President Obama promised a bold new initiative and I guess what he gave us is the $4000 tax credit to employers that hire a worker who had been unemployed longer than 6 months.
Coming on the heels of the contentious debt ceiling debate, the President was fully aware the country was in no mood for more government spending. So in his speech, the President called on the controversial Congressional "super-committee" to add the $450 billion the "jobs" plan would cost to their already overwhelming and politically impossible task of cutting $1.2 trillion from the nation's future deficits. (Nevermind that our nation will incur more debt than that this year alone...)
Even as the President called on Congress 17 times in his speech to "pass this bill" immediately, it took the administration five more days after the Joint Session address to produce a proposal in legislative language that could actually be reviewed by Congress. As is always the case, the devil is most definitely in the details. And there are plenty of details in the 155 page proposal.
One detail to emerge is an obscure provision in the unemployed-hire tax credit initiative that would allow those that are not hired to then sue the employer they interviewed with for discrimination on the basis of being unemployed. So the law says that if you don't get hired, you can then go sue the company that didn't hire you because they were looking negatively at your unemployment status. Obviously this makes no sense, but more importantly, what company would even interview someone unemployed if there was the prospect of a lawsuit if the candidate wasn't the right one? Perhaps this was a favor granted to the legal profession to increase their overall billable hours but beyond that will do nothing to promote job growth.
Another detail to emerge is the President's proposal to offset these "temporary" spending increases so that they become deficit-neutral. Shockingly, the plan is a tax increase, namely on the "rich" and those greedy oil companies. Once again, "rich" is defined as making over $200K. Looking at the existing tax tables and not taking into account any deductions, the tax burden on $200K is over $50,000. Does anyone really think someone making $200 and paying $50 in taxes is not paying their fair share?? Oh, and the tax increases would be permanent.
If the President were serious about changing the economic climate in this country, he would propose comprehensive tax reform that closes these loopholes everyone agrees distorts the free market and, in exchange, lower overall rates and condense the brackets.The corporate tax rate should be lowered from the internationally-uncompetitive rate of 35% to somewhere under 20% and companies should not get tax benefits because of beneficial relationships and costly lobbyists. What new company could compete paying 35% when their competition is paying zero?
If the President were serious about growing the economy, long-term structural changes would be proposed, not more isolated government spending. Business-strangling regulations would be removed. Certainty needs to be established and the uncertainty about upcoming costs associated with ObamaCare compliance and future tax increases do not provide this. Dependence on more costly foreign energy sources does not breed confidence either when we are not tapping our own resources at home.
No, the President is not serious about job-creation. This "new" plan is more of the same: a wish-list of handouts to political allies and one last back-door attempt to slide in tax hikes before the next election. The President's team has to know this plan will not be passed in Congress. So what exactly is their goal in all of this because it is certainly not to create jobs for the unemployed?
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