President Obama’s “American Jobs Act” proposes far more than the $300 billion reports leaked this week. The proposal would invest $447 billion into the flailing economy in the form of $253 billion in cuts and $194 billion in spending. But the big numbers presented in tonight’s speech don’t break down where this money is coming from or how it will affect Americans. Here at NJ, we’re whipping out our calculators and getting into the nitty gritty.
We’re a few dollars short in each category, no doubt a sign that the administration is leaving some wiggle room in their proposal.
Tax Cuts: $253 billion total
Employer payroll taxes by $65 billion: This is designed to cut payroll taxes in half for 98 percent of businesses, according to a senior administration official.
Employee payroll cut by $175 billion: By extending the current tax holiday set to expire in December, the president’s plan would eliminate payroll taxes for firms that increase their payroll by adding new workers or increasing the wages of their current workers (up to $50 million in wage increases.)
Long-term unemployment tax credit by $8 billion: According to the Bureau of Labor Statistic, those out of work for more than 27 months make up the bulk of the unemployed in America.
Spending: $194 billion total
Infrastructure bank by $10 billion: Echoing the bipartisan proposition brought by Sens. John Kerry, D-Mass., and Kay Bailey Hutchison, R-Texas.
Transportation improvements by $50 billion: For immediate improvement to transportation surfaces.
Unemployment insurance and reform by $49 billion: Extending payments to the unemployed would keep 6 million people who would see the end of the line in December. The reform would allow unemployment insurance to be given to workers whose hours are reduced but not necessarily laid off. The money would work as a bridge for workers to keep gaining experience before they receive a full time job.
Modernizing schools by $30 billion: This supply would be split between federal and state hands to refurbish at least 35,000 public schools. The money that would be allocated is less than the $50 billion proposed by former White House adviser Jared Bernstein. The plan would also protect teachers at risk of losing their jobs.
Funds for low-income students by $5 billion: Part of the “pathway to work” fund. The current unemployment insurance rate for young people is “terrible, deplorable,” according to a senior administration official.
Rehabilitation and repurposing of vacant property by $15 billion: The government will pay people to tear down vacant homes and reduce urban blight.