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The Good, The Bad, & The Rehashed: The President’s “Economic Address” Proposals Unlikely to Spur Job Creation
For Immediate Release September 12, 2011
Douglas Kellogg, (703) 683-5700
Pete Sepp, (703) 683-5700
(Alexandria, VA) – President Obama is pushing Congress to immediately pass the American Jobs Act formally introduced in Congress today. But the 362,000-member National Taxpayers Union (NTU) warns that despite some tax relief proposals and overtures to free trade and regulatory reform, the President’s plan is filled with rehashed spending schemes that offer little to warrant optimism on the job front.
“Despite some plans of near-term tax reductions for workers and businesses, the President offered far fewer clues of specific long-term relief from what remains a burdensome tax system,” said NTU Executive Vice President Pete Sepp, “The vast spending proposals in the American Jobs Act, and the President’s veiled threats to hike taxes on selected industries like oil and gas, would lead to predictably ugly results for the U.S. economy.”
NTU’s assessment of President Obama’s key proposals:
The Good (or at least adequate)
Much of the tax relief proposed by the President is already in place. While letting the measures expire would quite likely cost the economy more jobs, maintaining the status quo should not be expected to alter the unemployment situation a great deal.
Passage of free trade agreements would indeed benefit the economy, but taxpayers will be wary of Trade Adjustment Assistance programs becoming part of the deal.
There were more spending proposals as well, adding up to a whopping $202 billion. The Infrastructure Bank has the potential to be quite a bit more expensive than its initial $10 billion price tag estimated by the White House. Rosa DeLauro (D-CT), who the President referred to as an “Infrastructure Bank Champion” has legislation for such an institution estimated to cost $25 billion over five years, according to the National Taxpayers Union Foundation BillTally project.
Unemployment insurance, transportation “investments”, and spending on teachers, are all old hat, tried in the stimulus of 2009 or other efforts over recent years. Combining these proposals into one package is unlikely to suddenly make them more effective.
The ugly reality of the President’s long awaited speech was that it featured mostly rehashed ideas. Whether a provision is in the good or bad column, it is probably not a new idea, and it’s likely to have already been tried in one form or another over the past two years.
Additionally, the President has no control over the Joint Committee that he says he will call on to pay for everything in the bill in an effort to avoid added debt. So further ballooning of the national debt may result.
The President also rehashed his call for tax hikes on politically convenient industries and individuals again. Such a move would definitely cost American jobs, diverting the nation from the President’s stated goal: job creation.
Taxpayers suffering under a weak (some say nonexistent) recovery and a Tax Code in dire need of systemic reform, along with the more than 9 percent of Americans looking for work, are unlikely to see much improvement in an economy that has already failed to respond to past approaches and variations of the proposals the President made last week.
The 362,000-member NTU is a nonpartisan, nonprofit organization working for lower taxes, smaller government, and economic freedom at all levels. More information on NTU’s work, is available at www.ntu.org.