President’s Tax Incentive Plan for Economic Recovery

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The President offered a bi-partisan plan uniting workers and businesses to create jobs and jolt the economy

Yesterday’s Presidential speech, before a joint session of congress, remarkably aligned Republican policies of tax breaks and incentives for businesses with Democratic policies of federal spending on infrastructure and welfare.

The American Jobs Act, unveiled yesterday but hinted at for weeks, was introduced as a non-controversial piece of legislation proposing solutions that have already been supported by Democrats and Republicans alike.

Amid the Cat and Mouse games that have appeared to all but overrun Washington recently, President Obama stressed the need to put country before party.

“Regardless of the arguments we have had in the past, or will have in the future,” the President said, “this plan is the right thing to do and you should pass it now.”

Mr. Obama spoke of returning to an America where hard work and responsibility paid off and where Washington needed to stop the “political circus” and start putting the interest of Americans first by fulfilling their unique responsibilities.

So what is The American Jobs Act?

Its purpose is simple, the President said. Designed to meet the urgent needs of the moment, this plan will “put more people back to work and put more money in the pockets of those who are working.”

The act will get construction workers, teachers, veterans, the long term unemployed and young people back in to the labor market. How? By offering a series of tax breaks and incentives for private companies.

There will be tax breaks for hiring new workers, tax credits for hiring America’s veterans, tax credits for hiring workers who have been looking for work for more than six months, and tax cuts for raising the salaries of those already working.

The President also announced (as expected) the continued cut in payroll tax; a plan, he said, that fifty house Republicans have already supported.

Small businesses are where most new jobs begin, and unlike large corporations, small companies have not come roaring back. The cut in payroll tax will directly benefit entrepreneurs, as will the plan to cut corporate tax, encouraging companies to invest and create jobs, “right here in the United States of America.”

The act hopes to instigate a recovery driven by business and workers, where Washington will simply lend a helping hand with a few cameo appearances.

In addition to government tax breaks for businesses, the President proposed setting up an independent investment fund for the construction industry to attract private dollars, and to issue loans based on how badly the project is needed and how much good it would do for the economy.

This is not the WPA of the New Deal. This is an idea based on a bill written by a Texas Republicans and a Massachusetts Democrat.  This is the federal government asking private business and investors to pick up the slack.  This is a proposal supported by America’s largest business organization and America’s largest labor organization.

The speech of course also included typical Democrat policies such as extending unemployment insurance, giving the “typical working family” a $1500 tax cut next year, and reforming the tax code so that the wealthiest Americans and biggest corporations pay their fair share.

But by far the biggest take-away was that Congress would start working for the people who hired them, by boosting employment.  The interesting part is that the President proposes to do this by making it worth while for businesses too. In this plan, President Obama brings workers and businesses together, on the same side.

“This is not class warfare or political grandstanding,” the President said. This is not the idealistic longing of the Democratic party base, this is a concrete, real life and bi-partisan attempt to meet the urgent needs of both workers and businesses.

Related articles

• Fact Sheet: The American Jobs Act (whitehouse.gov)
• Obama Moves Job Speech Amid Skirmish With Boehner (nytimes.com)
• Obama Challenges Congress on Jobs Plan (nytimes.com)