"There should be nothing controversial about this piece of legislation," President Obama said about his 'American Jobs Act' proposal Thursday evening. "Everything in here is the kind of proposal that's been supported by both Democrats and Republicans, including many who sit here tonight." (See: Obama Goes Big — and Political — with $450 Billion Stimulus Plan)
Indeed, the main elements of the $447 billion program are fairly mainstream and have garnered bipartisan support in the past, including:
- Payroll tax cuts (to 3.1% from 6.2%) for both workers and employers and 100% tax credit for new investments in 2012. (Price tag: $245 billion)
- Infrastructure spending and funding for state and local governments to rehire teachers and first responders. ($140 billion)
- Extending unemployment insurance and new programs for the unemployed, including credits for businesses that hire veterans or the long-term unemployed. ($62 billion)
The plan will give a "badly needed boost to the economy," says Miles Rapoport, president of Demos, an independent (left-leaning) think tank.
"He's extending unemployment benefits, putting more money into consumers pockets, giving tax breaks to business to hire and prevent more layoffs which will create a higher level of employment [and] get the economy going."
But there's nothing so simple when it comes to politics or economics. While Rapoport found plenty to like in Obama's proposal, Euro Pacific Capital's Peter Schiff is highly (and predictably) critical of the plan.
"It's more of the same: Another stimulus plan dressed up as a jobs plan, it's not going to create jobs," Schiff says. "Everything the government is doing is undermining the economy and creating more unemployment. If big deficits created employment we'd have full employment right now because deficits are bigger than ever."
As you might expect, Schiff scoffs at Obama's claim that the plan is paid for and won't add to the deficit. "It's not paid for," he declares. "What he's talking about is promising to make cuts five or 10 years from now to theoretically pay for money we're borrowing today."
Rapoport counters that economic growth is the best way to solve the deficit, "not by austerity that puts people out of work."
As you'll see in the accompanying video, there's not much Rapoport and Schiff agree on, which might make for good video but is really bad when it comes to making policy. Hopefully Congress will, as the President said, "stop the political circus and actually do something to help the economy."