What To Expect From Obama's Jobs Agenda

Wednesday, August 17, 2011

On the Brian Lehrer Show today, Peter Coy, economics editor for Bloomberg Businessweek, examines the president's options for "a very specific plan to boost the economy, to create jobs, and to control our deficit.".

The president has talked about extending the pay roll tax cut and federal unemployment benefits, creating an infrastructure bank to fund large-scale building projects, ratifying free-trade legislation and introducing a patent reform bill.

Coy says extending the unemployment benefits might be a short-term solution, but “ a short term band-aid is not the worst thing in the world.”

It may not be enough, but I think it’s something that ought to be done.

The free trade agreements may have a mixed impact on jobs. Unions did not like it and thought that it cut jobs and wages, while manufacturers argue that jobs were created. Either way the costs to consumers do decrease. Coy thinks the infrastructure bank, on the other hand, is a purely positive idea.

I think that infrastructure spending, while it might take a while to roll out, would be a good thing. A, we have real needs, and B, we’re going to be stuck with an under-performing economy for quite some time.

Congressman Paul Ryan and other Republicans have been opposed to any payroll tax cut. He wants instead a permanent extension of the Bush tax cuts. Coy says that Ryan’s take is not very accurate

The effect of the tax rate in the US is not particularly high, after you take into account all the loopholes and exemptions that are built into it. But that’s a priority of his, to get the corporate tax rate down.

Still, Coy said he thinks the chances of a payroll tax cut extension passing Congress is likely.

After the Republicans have harped on the idea that taxes are bad and that tax increases are particularly bad—to say that we should, in effect, increase the pay roll tax by restoring it to it’s ordinary level, to argue that we should not do that seems to cut against the message that they’ve been conveying for so long.

Tax breaks for job creation will likely be in the new plan, possibly coupled with elimination of some subsidies and corporate loopholes. Coy said that would not be, on it’ own, enough to effect the type of economic change needed.

It turns out that even if you eliminate a lot of tax loopholes, but you simultaneously lower rates, then the very top income brackets still come out on net, ahead. The only way that the burden shifts more towards the upper bands of income is, if you keep tax rates were they are, while eliminating some of the loopholes… such as the mortgage interest deduction, which benefits the rich much more than the poor.



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Comments [14]

MartinC -

Why are you crowing about the deepness of the hole that Dubya and the GOP dug?

"Vote for us. We wrecked the economy worse than the Democrats could fix it!" is not a campaign slogan that anyone can with with.

Unless they get their 'news' from NewsCorp...

Aug. 17 2011 11:56 AM

Obama's so called "Patent Reform" is a job killer. The America Invents Act favors established Companies, that reduce jobs, over individual inventors and start-ups that create jobs. Wikipedia: Opponents of H.R. 1249 note that startup companies, not established companies, drive net job growth in the U.S. economy. ...“net job growth occurs in the U.S. economy only through startup firms".... existing firms are net job destroyers, losing 1 million jobs net combined per year. By contrast, in their first year, new firms add an average of 3 million jobs. ... during recessionary years, job creation at startups remains stable, while net job losses at existing firms are highly sensitive to the business cycle. "...growth would be best boosted by supporting startup firms.
H.R. 1249 ...will lead to results similar to other nations' patent systems on which the bill is modeled — market incumbents will become further entrenched, the rate of startup formation will fall to levels in other countries, and access to angel and venture capital will fall to the levels of other countries, as described in the Impact of the Changes section below. A startup which relies on patents for protection from competitive risk, will, under H.R. 1249, lose the protections of today's law to assemble the capital, strategic partners, and time for R&D and testing. The startup, exposed to the risk of copying by an established player in the marketplace, will be unable to attract venture capital, and so will lack the financial resources necessary to commercialize the startup’s invention and grow the company. The weakening of patent protection diminishes incentives for investments and development.

Aug. 17 2011 10:39 AM
John A.

I second the deleted commentors remark that @MC made a racist comment. In that regard I Do Not Support the producers decision. Sorry.

Aug. 17 2011 10:37 AM
Kathryn from Manhattan

I don't agree with Mr. Coy that the home mortgage interest deduction benefits the rich. It benefits the middle class.

Aug. 17 2011 10:27 AM
Donna from NYC

Compete with China? We can't compete with China.

I had a business a couple of years ago, wanted to use American products. Lowest price I could find here (after months of searching for a manufacturer) $8/piece. Price in China? 80 cents/piece. How are we going to compete with that? We can't.

Aug. 17 2011 10:26 AM

Comments have been moderated. Please remember to keep comments on topic, civil, and brief.

Aug. 17 2011 10:24 AM
Donna from NYC

"Eleanor from Brooklyn
Obama should beef up the DOL and order a crackdown on FLSA violations among unpaid internships, in both the for-profit and nonprofit worlds. These positions eliminate paid positions, undermine unions, exploit desperate young people and restrict many career paths to the privileged (since internships are increasingly a prerequisite for getting jobs in many fields)"

AGREED This is a huge poblem in NY

Aug. 17 2011 10:23 AM
Ken from Little Neck

As your guest has made very clear, the entire republican platform is geared towards making the wealthy even richer by taking benefits away from those who can least afford it. What is really distressing to me is that Obama seems to be going along with it. Why is he talking about more tax breaks and deficit reductions? We need actual job creation, not wealth redistribution!

Aug. 17 2011 10:21 AM

Positive suggestions -

Put the 'job creators' on notice, the Bush Tax Cuts are toast if employment doesn't drop below 7% by December 2012.

Lower the FICA rates but spread it across more earnings. Stop the company match at 2X median income.

Increase tax rate on dividends to at least match the tax rate the median income earners pay.

Aug. 17 2011 10:20 AM
David from Greenpoint

Infrastructure jobs by negligent and irresponsible tradesmen do more harm than good!
Since July, 2007, I watched street paving contractors hired by the DOT dumping tons of hot asphalt into the storm drains simply because they did not take the easy and economical precaution to cover the drains before the paving truck spread the asphalt. In July 2007, I sent registered letters to the mayor, Brooklyn Borough President Marty Markowitz, Assemblyman Joseph R. Lentol, Commissioner DOT Janette Sadik-Khan, Commissioner NYC DEP Emily Lloyd, and our NYC Council Member David Yassky. Yet, the practice has still not been abated. Before removing the pavement, as well as repaving, there are no covers placed on the storm drains. Some of our drains in Greenpoint are completely filled with asphalt, as well as in other parts of the city.

Aug. 17 2011 10:20 AM

This subject would be much more interesting with a more stimulating speaker. I'm about to fall asleep and have quickly lost interest.

Aug. 17 2011 10:19 AM
Donna from NYC

The person on this segment sounds clueless, just like the president. This is not giving me any hope at all.

"Uh yeah, we can build some roads and maybe hire some people that haven't had a job in three months"

Aug. 17 2011 10:19 AM
Eleanor from Brooklyn

Obama should beef up the DOL and order a crackdown on FLSA violations among unpaid internships, in both the for-profit and nonprofit worlds. These positions eliminate paid positions, undermine unions, exploit desperate young people and restrict many career paths to the privileged (since internships are increasingly a prerequisite for getting jobs in many fields).

Actually, Obama could start by converting all his legions of unpaid interns to paid employees -- the White House's predilection for unpaid labor helps limit opportunities to participate in government to the wealthy.

Aug. 17 2011 10:19 AM
Martin Chuzzlewit from Manhattan

Ah, so after almost 3 years of little growth (0.8% in the first half of 2011) and a dismal jobs picture (8 million fewer people working than when he took office), "BUS BOY" decides it's time to address these issues.
Gee, what's the rush, Sparky?
(At least that is today's talking point on his phony "listening tour" and at his staged "town hall meetings" with hand-picked sycophants.)

And how does this prevaricator get away with lying about x,y,z millions of jobs "created or saved". Where is the media? Oh, that's right, they're too busy looking for dirt on Rick Perry.

You have all lost your minds.....this emperor has no clothes....just an empty suit.

Aug. 17 2011 08:56 AM

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