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Unavoidably missed the speech, so I didn't get to hear the tone that others here have complimented. But here's a quick break down of the proposal itself, based on reporting by Reuters.
[Note: All comments are my own first thoughts. Maybe it's going to be better than it sounds. It was more $$bucks than I expected, but digging into the details suggests its considerably less bang than I hoped. Anyway, these are first, late night, reactions after reading the Reuters summary of the proposal.]
Here's the breakdown:
EMPLOYEE PAYROLL TAX HOLIDAY
Obama is proposing a $175 billion one-year extension and expansion of the employee payroll tax holiday that would halve the tax rate to 3.1 percent in 2012.
Commentary: Putting this money in the pockets of workers is a good thing, but characterizing it as a Social Security payroll tax holiday will bite us in the butt. Yes, I know that Treasury is directed to make the Trust Fund whole, but who is listening to that? A more direct way to do this would be to revise and extend the earned income credit, temporarily, to cover everyone whose income is below the payroll tax maximum. Disconnect it from Social Security. Same effect, better narrative. But Obama wants to portray it as a tax cut, I guess to make the Tea Party happy.
EMPLOYER PAYROLL TAX HOLIDAY
Obama is seeking $65 billion to encourage small businesses to hire more workers. This includes halving employer payroll taxes to 3.1 percent for the first $5 million of a company's wage bill in 2012, which the administration says will reach 98 percent of small businesses. He also wants a complete payroll tax holiday for increasing the size of the payroll by up to $50 million above the prior year, either by hiring new workers or raising the salaries of the existing labor force.
Commentary: a) This is outright fraud. Does Obama really think employers will hire workers they don't need in order to get a tax break. Open letter to Obama: tax cuts are do not cover the cost and are not worth the hassle of taking on new employees. What will they do, stand around the shop counting up the tax profits? Employers will take advantage, of course, if they are hiring anyway for other reasons. I feel certain Obama knows that.
Obama wants to broaden homeowner access to mortgage refinancing and help the battered housing market by allowing households to take advantage of ultra-low borrowing costs that would help them put their finances on a sounder footing.
Administration officials say he hopes to push forward with a plan in the next few weeks. To hammer out a proposal, the Treasury Department is talking with U.S. mortgage finance giants Fannie Mae and Freddie Mac, and their regulator the Federal Housing Finance Agency, to figure out ways to broaden access for homeowners by removing barriers to refinancing.
Commentary: Reserved, pending details, and lots of detail will be needed on this one. Who qualifies? What's the program? Who profits? Who takes a loss? What will it cost? Will the Super Committee have to pay for this too? Will it be every bit as effective as HAMP?
EXTENDING 100 PERCENT COMPANY EXPENSING INTO 2012
At a cost of $5 billion, Obama wants to extend a 100 percent expensing tax break for companies, allowing them to immediately take a tax deduction for investment in new plant and equipment.
Commentary: More fraud. Companies may take advantage of this, but watch out for manipulation of this program. a) It will be used to fast-track deductions for investments that would have been made anyway, and b) a substantial portion of the investment will be in new plant and equipment that reduces the need for labor, long-term. Think "productivity gains," all coming these days at the expense of American labor.
$85 BLN IN AID FOR STATE AND LOCAL GOVERNMENTS
-- $35 billion to keep teachers, firefighters and police officers in their jobs, of which $30 billion would go to schools and $5 billion to police and firefighters.
Commentary: More, please. And how about working with schools to reduce and subsidize tuition for higher education? How about partial forgiveness of predatory student loans?
-- $30 billion to modernize schools and community colleges.
Commentary: More, please.
-- $15 billion to rehabilitate and refurbish vacant and foreclosed homes.
Commentary: Reserved pending details. Spending the money will put some idle contractors and carpenters back to work and may improve some neighborhoods, but what happens when the homes are refurbed? How are they returned to productive use? Who will occupy them? Much detail needed here, though this could be good. If so, much more money will be needed.
-- $5 billion to help low-income youths and adult workers, supporting summer and year-round jobs for young people and support subsidized work for unemployed low-income workers.
Commentary: This sounds good but is ambiguous. What does it mean to "support" summer and year-round jobs? What is subsidized work and who profits from it? If we want to put these folks to work, and I do, let's don't pay private companies to hire them for their own profit. Believe me when I say companies are sitting on Scrooge McDuck's wet dream of profits already. Let's put these people to work on projects that benefit us all. This situation is crying out for the 2011 version of the WPA. One idea, why not hire them to go neighborhood by neighborhood and do basic energy conservation retrofitting of homes and small commercial properties at an affordable cost to property owners, even subsidized where it makes sense to do so? Should this $5 billion be added into the potential fraud column?
ROAD, RAIL AND AVIATION INFRASTRUCTURE SPENDING
Obama seeks $50 billion to invest in highways, transit, rail and aviation, including upgrading U.S. airports and supporting Nextgen Air Traffic modernization.
Commentary: Sounds good. Problem with highways is, build them and we will come, driving our new SUVs. Emphasis on transit, please.
Obama wants $10 billion to capitalize an infrastructure bank to leverage private and public infrastructure investment "without earmarks or traditional influence," the White House says.
Commentary: WTF? We, the public, can borrow money at 0% effective rate of interest from the Treasury to fund these projects. Why not borrow $500 billion or a trillion or even two at that rate and get the country rebuilt? We would wind up owning the equivalent assets. Instead, Obama would rather borrow money from private investors at exorbitant rates? Another public-private partnership? Who will control this program, to benefit whom? Who will own the infrastructure and who will pay for it? What does it mean to make public investments "without traditional influence? Does that mean the public doesn't have a say? I can't put down the suspicion that this $10 billion should also be added into the fraud column.
EXTENDING UNEMPLOYMENT INSURANCE, BRIDGE TO WORK
-- $49 billion for a one-year extension of long-term unemployment benefits that would otherwise expire, which the White House says prevents 6 million jobless Americans from losing benefits. It includes reforms to the jobless aid system and a "bridge to work" program to help get unemployed people back to work.
Commentary: Good. Must be done. No brainer, except that "bridge to work" program. Is that the one where we pay the employees and force them into free labor at Walmart? Instead, let's wrap it into real work building infrastructure for the next generation.
-- $8 billion for tax credits for long-term unemployed.
Commentary: Okay. Details needed, but, more please.
SUPER COMMITTEE (not mentioned by Reuters)
Obama promised that the Super Committee will pay back the entire cost of the program. That's a deal killer. Just mentioning that the jobs program has to be paid for is a deal-killer. But handing off the repayment plan to an unaccountable super committee of the already unaccountable American Plutocracy is worse.
Look, reducing the tax bite on workers is okay by me. But it's caving to the Tea Party narrative, once again, rather than creating a Progressive narrative. It's only indirectly job-creating. Lots of folks on this site don't seem to think that narrative matters. But we are human beings. We are people of the story. Ronald Reagan and Frank Luntz understand that. Billy Graham and George Bush understand that. John Kennedy and Bill Clinton understand that. Give us a story to believe in and we will live and die for it.
We are all storytellers here. Why do we do it if we don't think it important?
The story of the Obama jobs program is simply this: let's cut taxes and jobs will happen. He's already working by executive fiat to cut regulation. Okay, and let's spend a little money on infrastructure that's piled up 20 years of deferred maintenance while we're at it, and throw a sop to sniveling homeowners, even though everyone knows they are the ones responsible for the mess we're in. And let's all put our faith in the revered Super Committee, the one that's going to solve our real problem, which is not jobs, but the deficit.
It's the Republican narrative. In case you can't tell, I'm sick of it by now, even when I hear it from Democrats.
But mostly, where are the millions of jobs and wage improvements in this jobs program that we must have to get back to a healthy economy? Where are the investments in energy and efficiency, in the job-creating technologies of the future, in manufacturing, in the work that must be done today to make American once again a first-class developed nation?
And why does he think that every dollar he spends on indirectly trying to encourage employers to create jobs has to be accounted for by the Super Committee, where it will be paid back by sucking our society dry?