On Dec. 8 President Barack Obama laid out his prescriptions for job creation before the press and enthusiastic academics at The Brookings Institute in Washington, D.C. Obama’s initiatives focused on much needed help for small business owners, infrastructure improvements, and energy conservation; in short, his proposals would be a booster shot for the much maligned, but arguably beneficial and ongoing, economic stimulus package passed shortly after taking office.
The stated goal of Obama’s jobs plan:
Small business, infrastructure, clean energy — these are areas in which we can put Americans to work while putting our nation on a sturdier economic footing. That foundation for sustained economic growth — that must be our continuing focus and our ultimate goal.
If there was a consistent theme to Obama’s jobs address it was cautious optimism. He acknowledged the difficulties faced by Americans during two years of economic recession, and that there will be “difficult months ahead,” but that “the storms of the past are receding.”
“The skies are brightening. And the horizon is beckoning once more,” Obama concluded.
Here are some of Obama’s targeted proposals for job creation. They are intended “to accelerate job creation in the short term, while laying a foundation for sustained economic growth.”:
- Additional help for small businesses.
- “…proposing to waive fees and increase the guarantees for SBA-backed loans.”
- Obama to advise Treasury Secretary “to mobilize remaining TARP funds to facilitate lending to small businesses.”
- “We’re proposing a complete elimination of capital gains taxes on small business investment.”
- Building upon progress made with the National Recovery and Reinvestment Act.
- “Proposing a boost in investment in the nation’s infrastructure beyond what was included in the Recovery Act.”
- Extending emergency assistance to seniors, unemployment insurance benefits, and subsidies for COBRA.
- Obama announced, “a new program to provide incentives for consumers who retrofit their homes to become more energy efficient.”
How much will it cost?
Obama’s mention of the TARP funds — $200 billion, already part of the deficit forecast, but not yet spent — was as close as he got to applying a price tag to the above initiatives. No doubt, this is where his critics will focus their attack.
Already, as Jill Lawrence noted at Politics Daily, House Minority Leader John Boehner issued an all-caps headline, “BIG IDEA IN THE PRESIDENT’S BIG SPEECH: CONTINUE THE DEFICIT SPENDING BINGE.”
Anticipating this, the president included some harsh words for Republican deficit hawks: (Emphasis added)
Folks passed tax cuts and expansive entitlement programs without paying for any of it — even as health care costs kept rising, year after year. As a result, the deficit had reached $1.3 trillion when we walked into the White House. And I’d note: These budget-busting tax cuts and spending programs were approved by many of the same people who are now waxing political about fiscal responsibility, while opposing our efforts to reduce deficits by getting health care costs under control. It’s a sight to see.
The cynics will do and say what they must. Republicans have spent every day since Obama’s inauguration feigning outrage over government spending, simultaneously claiming no responsibility for the record setting money hole, that was the George W. Bush administration. A sight to see, indeed.
Will these initiatives succeed in creating jobs?
According to Nobel Prize winning economist Paul Krugman, we need to know more about how much money will spent.
Krugman was one of many economists sounding the alarm that the Recovery Act wouldn’t be sufficient. In his Nov. 29 New York Times column, he recommended direct government employment programs, perhaps more ambitious than Obama laid out at the Brookings Institute.
In a blog post following the speech, Krugman wrote:
…it can’t be done without a significant amount of funds. If Robert Reich is right and it’s only $70 billion, it’s a Potemkin policy — all facade, virtually no substance.
How big do the numbers have to be to make it serious? It’s hard to see much impact with less than $200 billion — and what I really want to see is that including all the pieces, from COBRA extension to state aid, it’s much bigger than that.
So show me the money, and I’ll tell you what I think about the plan.
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Image from flickr user, Obama-Biden Transition Project, via CreativeCommons.org