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A New Obama Jobs Bill

September 1, 2010 - by Donny Shaw

Having pushed aside energy/oil spill legislation until the lame-duck session, the weeks between when Congress reconvenes from the August recess on September 13 and before they adjourn for election season in October will be focused on one thing — saving the U.S. economy from slipping deeper into recession.

There’s a small business jobs bill on tap (H.R. 5297), a vague plan to do something with the expiring Bush tax cuts, and now, according to the Wall Street Journal, a new jobs package from the Obama Administration:

The Obama administration is considering a range of new measures to boost economic growth, including tax cuts and a new nationwide infrastructure program, according to people familiar with the discussions.

The president’s economic team has met frequently in recent days to list ways to bolster the struggling recovery, according to government officials.

On the list of possible actions: additional tax cuts for small businesses beyond those included in a $30 billion small-business lending bill before the Senate. It’s not clear what those tax breaks would target or how much they might cost in lost revenue to the government.

Also in the mix: a possible payroll tax cut for businesses and individuals, as well as other business tax breaks, according to people familiar with the discussions. Currently, income taxes are scheduled to rise with the expiration of Bush-era tax cuts at the end of this year.

Unfortunately, as this bill is crafted and decisions are made about what to include, creating and saving jobs is going to take a back seat to building a package that can actually pass. Infrastructure investments will be a tough sell with Republicans, and Democrats won’t exactly be thrilled to vote for more business tax cuts. Done right, both have the potential to create jobs and stimulate the economy, but all the attention this election season on the federal deficit is likely going to distract legislators from focusing on these more pressing issues.

I’m guessing this new Obama jobs packaged gets bundled together with the Bush tax cuts bill. There is a baseline agreement right now on extending the tax cuts for all people earning less than $250,000. If the Republicans can get an extension of some of the tax cuts for higher earners, they may agree to some more temporary stimulus in the form of infrastructure spending. Obviously, there’s nothing ideal about such a package. Nobody will be thrilled, and it wouldn’t do as much to boost the economy right now as one that took the revenue losses from an upper-income tax break extension and invested in people who are most likely to spend. But, after watching the Senate basically stall out for the past few months, we seem to be facing a choice between nothing and something like this. Time for filibuster reform, anyone?

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