by Linda Beale
The House passed a puny measure worth about $154 billion over a decade. The Senate, strangled by the GOP party of no, appears set to pass a bill that does almost nothing and costs only about $15 billion over a decade. See Deal on Jobs Shows Limits of Push for Bipartisanship, NY Times, Feb. 12, 2010 and the NY Times editorial, Ho NOt to Write a Jobs Bill, NY Times Feb. 12, 2010 at A 26.
What is Reid proposing?
1) waiver of the ER 6.2% Social Security tax for workers hired who haven’t had a job for 60 days, plus a $1000 tax credit for any new employee retained for 52 weeks.
this is really puny stuff. First, it’s a tax break for an employer who won’t be likely to hire a new employee for the break–too little at stake, and new employees aren’t hired until there is work for them to do. The employer is more likely to pocket this money for himself or his shareholders–a nice little extra profit. Second, the employer will just get the reduced taxes for new employees that it would have hired anyway–it isn’t at all likely to create new jobs that wouldn’t have been created without this “ice cream topping”. So this is another piece of the current corporatist agenda–giveaway to business, without any real results for ordinary Americans.
2) extend the expensing of capital investments yet again.
This is not just puny, but also “been there, done that” and no magnificant new job creation was forthcoming. Businesses only need to make capital investments if they expect more business that their current equipment can’t handle. If they don’t have consumer demand, they don’t need the new investments. This expensing provision was already part of the Bush “job creation” business-friendly tax cut packages. Look at the record there–really puny job creation and nothing to show that tax cuts and deregulation do anything to create sustained job creation. Further, since it’s already been done, it has been around for long enough that businesses that were at the point of needing new equipment just to keep going may have already used it to accelerate somewhat that equipment purchase. But they aren’t gonna buy equipment they don’t need. That’s like thinking that a set of 64 wine glasses is so cheap that it’s a bargain, but then realizing that you still have 32 in a box that you haven’t used for the past three years so even a bargain is a waste of money.
3) reauthorize spending on road and transit programs
Well, this is at least related to working on public infrastructure projects, which is the only thing that really has any prospect of creating (or preventing the loss of) jobs. It should be focused on innovative “green” solutions–inner city rail, etc. And those projects will create real jobs. But this is way too little money –get rid of programs 1 and 2 and put all that money here, plus about $150 billion more over the next year, and we might have something worthwhile.
4) provide a federal subsidy to states for a portion of the interest on bonds used to finance public works projects
A good idea, but too puny. States are truly strapped for cash, and as the editorial points out, states employ about a fourth of the work force (almost as many as the health sector) and have been cutting jobs right and left to balance budgets. Those jobs matter and have a huge impact on morale and on other things–nothing like a bureaucratic entanglement from lack of personnel to delay that public infrastructure project. So this puny little amount of money will help, but it isn’t nearly enough.
What should Congress be doing instead? It should be thinking of public infrastructure and human capital projects that provide3 support to important public institutions that will last long beyond the current Recession. Congress should be funding public transit and renewable energy projects that would directly put to work hundreds of thousands of ordinary Americans. Another important public infrastructure project that would make a real difference in unemployment? How about providing 1-2 billion apiece to the ten largest inner cities to be used for urban renewal–destruction of ruined buildings, building of public transit and energy projects–with the requiremment that at least 75% of the employees be from the city itself. Detroit’s mayor has said that tehre aare 10,000 buildings that need to be pulled down in the city. That would be great work for unskilled laborers and make a marvelous dent in uhemployment. And it should be providing another stimulus packagge for the states to support education from K-16 and beyond–the best investment we can make in keeping our US universities and schools great, keeping educators employed, and offering ordinary Americans the chance to better themselves through educational advancement.
Just imagine. What if Congress would have the courage to discuss these issues publicly? Quit thinking about their corporatist patrons? Start thinking about ordinary Americans? And actually fund public infrastructure and human capital support over the next two years.
crosposted with ataxingmatter