Obama put forth some elements of a second jobs bill. With that, I strongly suggest all those who were disappointed, disgusted with the first Stimulus, start right now pushing for legislation we need.
Here are the main elements, laid out in the State of the Union Speech.
- Take $30 billion of the [TARP] money Wall Street banks have repaid and use it to help community banks give small businesses the credit [Subsidized Small Business Loans].
- Small Business tax credit - one that will go to over one million small businesses who hire new workers or raise wages
- Eliminate all capital gains taxes on small business investment
- Tax incentive for all businesses, large and small, to invest in new plants and equipment
- We can put Americans to work today building the infrastructure of tomorrow [Direct Infrastructure spending]
- Slash the tax breaks for companies that ship our jobs overseas and give those tax breaks to companies that create jobs in the United States of America
- Keywords "jobs for Americans"
Note, we must get the hiring tax credit tied to only U.S. citizens, LPR workers. We cannot let this credit be used to import even more foreign workers, encourage even more illegal immigration or hire workers who happen to not be on U.S. shores. If one is going to use our taxpayer dollars for job creation for us, by God, would this Congress finally realize that they must put U.S. workers first and tie those government expenditures to the citizens who eventually will foot the bill.
The tax incentives for capital investments by businesses, again, needs to be tied to a Buy American requirement. While any tax incentive for investments will help overall GDP, by tying this tax credit for U.S. goods, that would give much more Stimulate effect to the Domestic economy, by hiring more U.S. workers and by consumption.
One fact, the business investment credit is the 50% bonus depreciation, which allows a 50% write off on business investments in the first year. This was part of the first stimulus bill. This tax credit did just expire, therefore, we should be able to get an accurate assessment from the CBO on just how effective this particular tax credit was for 2009.
On the direct infrastructure spending, I highly recommend Congress follow the AAM plans, which are the most thorough I've seen. Most importantly, Congress needs to change the contract award process and the overall management process. Consider those projects and hires as actual government managed projects instead of simply handing over no-bid Iraq style contracts.
On the elimination of capital gains, this concept must be tied to the hiring of U.S. citizen, LPR workers and that the business is 100% operated in the United States. While I am all for massive venture capital being invested in a host of start-ups at this moment, a key element is to make sure those small businesses actually are legimate businesses which have at least 10 employees but also that this business and those workers are American. (Remember an American engineer generating innovation and patents is classified as a worker). There are thousands of very innovative Americans who are capable of innovation, startups and patents, who right now....cannot even get a job at the home depot. This is an outrageous crime for the economic future of America (never mind leaving our most brilliant talented citizens high and dry and not supported).
Obama endorsed the restructuring of the corporate tax code to stop rewarding corporations to offshore outsource jobs. This is a change. Obama abandoned this agenda some 6 months ago, so it's good to see this in the State of the Union Speech. There is much more this administration and Congress needs to do to stop multinational corporations as well as unscrupulous countries (India) and businesses whose entire profit model is simply wage arbitrage as well as those corporations manipulating national tax codes around the globe.
From the State of the Union Speech Obama acknowledged (finally) that so called emerging economies are simply kicking our ass.
China's not waiting to revamp its economy. Germany's not waiting. India's not waiting. These nations aren't standing still. These nations aren't playing for second place. They're putting more emphasis on math and science. They're rebuilding their infrastructure. They are making serious investments in clean energy because they want those jobs.
I do not accept second place for America.
I sure as hell hope so because you're going to have to enact policy as well as legislation that isn't too popular with special interests but would assuredly put the United States back on the path to be #1.
We need to export more of our goods. Because the more products we make and sell to other countries, the more jobs we support right here in America. So tonight, we set a new goal: We will double our exports over the next five years, an increase that will support two million jobs in America. To help meet this goal, we're launching a National Export Initiative that will help farmers and small businesses increase their exports, and reform export controls consistent with national security.
Obama then went further to describe more free trade agreements. Now, firstly many of these trade agreements are highly doubtful to help the U.S. export numbers. Instead odds are they will make our trade deficits even worse with more cheap labor imports. The Obama administration simply needs to demand China float their currency as this is the largest factor currently to help the United States reduce it's trade deficit as well as spawn manufacturing jobs in the United States.
All please beware. We have seen many, many times goals stated and used to justify some absurd trade agenda that hurts U.S. workers and actually increases our trade deficit. In other words, the claims of a particular policy are actually upside down. One can recognize this one with the claim that offshore outsourcing helps American workers. A very obvious insulting lie, not only in statistical fact but also straight from economic theory this is a lie. Labor arbitrage assuredly does not help U.S. workers.
In the speech, President Obama was referring to the $155 billion dollar House Jobs Bill, passed last month and which the Senate is working on.
Of course many of our lovely Senators are whittling down the Senate version to more useless tax cuts. That said, the Senate bill is still being crafted. It has not passed. The good news is Senator Byron Dorgan is the one crafting this legislation, so one might have a chance to get some much needed Buy American and Hire America stipulations in the bill.
I have other job creation policy recommendations in this post.
We weren't planning on covering the State of the Union because we were not expecting any endorsement of a jobs bill.
Now, we all know that the criticism will be the beyond belief 10% official unemployment rate and a U6 of 17.2%, the spending of $787 billion dollars and the massive deficit.
The key here is to point out just how much Stimulus money do not go to direct job creation. That is the key. We must get Congress to tie job creation to Americans and to keep all funds within the domestic economy in order to get the most bang for the buck. Another element is to ensure infrastructure spending is on projects which are investments. Projects that are analyzed to give large financial and economic returns in the future. Examples of such past projects are the Hoover Damn, the entire highway system from the 1950's, transportation efficiency improvements and obviously projects which reduce foreign oil imports.
The point is it's clear there will be a Jobs Bill Redux passed, so now is the time to write your Congress representatives and especially your Senators and demand we really get strong Hire America and Buy American, along with invest in America jobs program as best we can.