Obama revealed today his jobs plan and no surprise, it comes up short.
I. THREE KEY AREAS FOR ACCELERATING JOB GROWTH
1. Helping Small Businesses Expand Investment, Hire Workers and Access Credit
- Tax cuts to support additional business investment next year – with a particular focus on struggling small businesses – with much of the cost recouped over time.
- Zero capital gains for small businesses: To encourage investment by small businesses and improve their access to capital, the Administration is calling for a one-year elimination of the tax on capital gains from new investments in small business stock. The Recovery Act allowed a 75% exclusion from capital gains taxes on small business investments.
- Extension of enhanced expensing provisions for small businesses: The Administration is also calling for the extension through 2010 of the Recovery Act provision that allows small businesses to immediately expense up to $250,000 of qualified investment.
- Extension of Recovery Act bonus depreciation tax incentive: To give businesses an incentive to invest, the Administration is calling for extending the Recovery Act provision that accelerates the rate at which business can deduct the cost of capital expenditures. This provision will put more than $20 billion in the hands of businesses in 2010, while enabling Treasury to recoup much of the funding as business regain their strength.
- A new tax cut for small businesses to encourage hiring in 2010. Although the economy is now growing again, many businesses remain reluctant to hire. In this economic environment, an employment tax cut for small businesses has the potential to accelerate the pace of hiring. The Administration believes it is important to provide a short-term tax incentive to encourage small business hiring and support employment, and will work with Congress to design a provision that accomplishes these goals.
- Eliminating fees and increasing guarantees for small businesses that borrow through major SBA programs in 2010. The President called for the elimination of fees and an increase in guarantees for loans through the Small Business Administration, a measure that extends provisions in the Recovery Act through the end of 2010. In addition, the President called for continued Treasury efforts to use the TARP to support small business lending.
2. Investing in America’s Roads, Bridges and Infrastructure
- Additional investment in highways, transit, rail, aviation and water. The President is calling for new investments in a wide range of infrastructure, designed to get out the door as quickly as possible while continuing a sustained effort at creating jobs and improving America’s productivity.
- Support for merit-based infrastructure investment that leverages federal dollars. The Administration supports financing infrastructure investments in new ways, allowing projects to be selected on merit and leveraging money with a combination of grants and loans as was done through the Recovery Act’s TIGER program.
3. Creating Jobs Through Energy Efficiency and Clean Energy Investments
- New incentives for consumers who invest in energy efficient retrofits in their homes. Smart, targeted investments in energy efficiency can help create jobs while improving our energy security and saving consumers money. The President today called on Congress to consider a new program to provide rebates for consumers who make energy efficiency retrofits. Such a program will harness the power of the private sector to help drive consumers to make cost-saving investments in their homes.
- Expansion of successful oversubscribed Recovery Act programs to leverage private investment in energy efficiency and create clean energy manufacturing jobs. The Recovery Act included historic investments that have helped to build the foundation for a clean energy economy. The Administration supports expanding programs for which additional federal dollars will leverage private investment and create jobs quickly, such as industrial energy efficiency investments and tax incentives for investing in renewable manufacturing facilities in the U.S.
No direct jobs program, instead, we get....you guessed it tax cuts. Did President Bush cast a spell over the White House that causes the next administration to become possessed and chant the same phrase, tax cuts, tax cuts, tax cuts? See this post on precisely who is haunting the White House.
Instead of a payroll tax holiday we get....a capital gains holiday. How many small businesses in the United States need a capital gains break? But do hedge funds? Sure thing they do. Do start-ups about to go IPO? How about the investors sitting with Pre-IPO stock? Are they classified as small business, yup. Needing modifications in accounting? Small business? I don't think so. Your basic Mom & Pop operations are not about accounting methods, they are about revenues and the need to make hiring cheaper to generate revenues. See any subsidies or tax cuts for direct hires? No.
All we see in terms of a payroll tax holiday is some vague concept to work with Congress. If the administration supports a payroll tax holiday, they would come out and spell it out, spit it out. So while the rhetoric could mean just about anything (as can the keyword change), not presenting a very specific proposal means...well, nothing. They can spell out a zero capital gains, more funneling to the dysfunctional and corrupt SBA, but spell out something specific to generate new hires by the businesses under 500 employees? Hell no.
The blog Manufacture This went out shopping and as reported in past posts on this site, they proved that cash for caulkers will stimulate the economies of China, Mexico and other nations where energy efficient materials are manufactured.
The only thing left is infrastructure projects that have a prayer's chance to generate jobs. The problem is the government is not initiating projects themselves based on macro economic data to enhance the national economy. Nope. They are simply running a grant program and supposedly selecting those that apply based on merit. Obviously we need to visit the TIGER track record to date, to see what counts as merit these days, but in terms of real infrastructure projects, this is about as good as it gets. Did I say we need 10.9 million jobs?
Once again we have initiatives which help foreign manufacturers, pouring U.S. taxpayer funds overseas like a sieve, really do not generate a hell of a lot of jobs and seem to be almost special favors under the guise of helping small business with their stock trades.
Amazing isn't it? We need to generate 10.9 million jobs. Yet studies detailing precisely how to do that are not implemented.
To pay for this the Obama administration will Tap TARP funds. But wait, cash for caulkers is estimated to cost $23 billion. Let's see. I can go out and buy a tube of caulk for a buck. I could give everyone in America a tube of Chinese made caulk for $307 million. Folks, realize, while with autos, some cars made in the U.S. benefited, these were large ticket items, involving some U.S. manufacturing and a host of sales people, dealerships. As the AAM noted, caulk is not the same as cars.
So, we have the same ineffective ideas, odds on favoring special interests, peddled as Stimulus....again.
What is that definition of insanity? Doing the same thing over and over again expecting different results? How about having the same special interests over and over again controlling the U.S. government?