Obama's Jobs Bill Won't Fix Unemployment
Since President Barack Obama unveiled his $447 billion jobs bill two months ago, it has come under heavy scrutiny and criticism from politicians and economists across the spectrum.
Chief among the arguments about the bill is whether or not it will work in creating any jobs, how it will be paid for, and whether or not it has bipartisan support.
Weeding through the misperceptions and false claims floating around in the media, it’s evident the bill in question is more about tax hikes than job creation, does not have bipartisan support in Congress, and is a campaign stunt to use against Republicans in 2012. The so called “American Jobs Act” doesn’t pass the cost-benefit analysis test and won’t put a dent in the unemployment rate.
Regarding whether or not the bill will actually create 1.9 million jobs as the president claimed, non-partisan Tax Foundation President Scott Hodge explains that the bill will create “few, if any” jobs due to the fact that the bill offers short-term measures and is not built around long-term expectations.
“I doubt that even a small incentive would encourage someone to hire someone that could cost tens of thousands of dollars over the long term,” Hodge says, “If you get a $5,000 tax credit to hire a $25,000 a year worker, that person is going to cost $125,000 over the next five years. So that incentive is relatively small for that long-term commitment.”
Bloomberg surveyed 34 economists to gauge the impact of the president’s jobs bill. Of those, 28 economists estimated how many jobs would be created by the bill. The median estimate was 275,000 jobs in 2012 and 13,000 jobs in 2013 for a total of 288,000 temporary jobs — far fewer than the nearly 2 million claimed by the president. That adds up to about $1.55 million worth of taxpayer money for every potential job it would create.
Critical to covering the cost of Obama’s $447 billion jobs plan is passing the so-called “millionaire tax,” a 5.6% surtax on income over that level. This is the real heart of the matter when it comes to the “American Jobs Act.” Obama knows there is no way the Republican-controlled House will pass such a tax hike and will use it to paint them as “obstructionists” to creating American jobs.
But last week on ABC’s This Week, House Speaker John Boehner (R-Ohio) highlighted 22 bipartisan job creating bills that have been passed in the House and have been obstructed by Democrats in the Senate.
Supporters of Obama’s jobs plan claim it has bipartisan support among moderates and independents, which is also not true.
Moderate Democratic Senators Ben Nelson (D-Neb.) and Jon Tester (D-Mont.) voted against the bill when it was brought up. Other moderates like Sen. Jim Webb (D-Va.) and Sen. Joe Manchin, (D-W.Va.), voted to let the bill advance but said they were opposed to it without changes.
“I can’t support tax gimmicks that do little to create jobs and don’t address the need for a bipartisan deficit-cutting plan,” Tester said in a statement.
“The present proposal looks good at first glance; it sounds good on a TV bite, but in all respect to the people who put it forward, I do not believe it’s smart policy and it does not go where the real economic division lies in our country,” Webb said.
“The truth of the matter is, most Democrats know just as well as I do that passing another stimulus and tax hike is a lousy idea — which is why the president is having such a hard time convincing many Democrats to vote for it,” Senate Minority Leader Mitch McConnell (R-Ky.) said.
Moderate Republicans like Senators Olympia Snowe (R-Maine) and Susan Collins (R-Maine) can’t get behind it either. “Job creation is indisputably our nation’s number one priority,” Snowe said, “Unfortunately, yet again, the Senate was faced with a take-it-or-leave-it package to which no amendments would be allowed.”
Collins said in a statement that “rather than working together to reach consensus on a plan that could truly make a difference, the Senate is once again voting on legislation designed not to help struggling Americans, but instead to score political points. This isn’t legislating; it is political theater.”
“I don’t believe the potential in this act for creating jobs justifies adding another $500 billion to our almost $15 trillion national debt,” Senator Joe Lieberman (I-Conn.) said. “In fact, I think the most important thing we can do to improve our economy, reduce unemployment, and create jobs is to bring our national debt under control.”
The bottom line is Obama is using the plight of unemployed Americans to pass a tax hike and campaign for a second term. And just like with the Affordable Care Act, the president wants Congress to pass this “now,” before we find out what else is in it and what it will and won't do.
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