As part of a weekly series exploring the policy positions of Barack Obama and Mitt Romney, this article examines Obama's American Jobs Act: what it claims, what it promises, and whether it delivers. Make sure to read our thorough analysis of Mitt Romney's jobs plan, and follow PoliticOlogy for weekly analyses of the candidates' positions.
Barack Obama's Job Plan
The Obama administration has been put in a corner concerning jobs. Vacillating between what’s politically feasible and economically essential, the White House seems to have moved into campaign mode, pushing for an idealistic vision that has little chance of making it through Congress. The Obama team manifested that vision in the American Jobs Act (AJA), initially proposed in September of 2011. Obama made a big political event out of the announcement of the American Jobs Act, convening a joint session of Congress:
Since then, the Act’s gone nowhere. The Obama administration never thought it would. However, the AJA shows what the Obama administration’s ideal legislation would accomplish and is a good place to start to understand what Obama would do in his second term to create jobs.
The act includes three principal parts.
Payroll tax cut: Much like the stimulus package, the American Jobs Act includes a tax cut. So, even in their ideal world with their politically untenable legislation, Democrats are compromising. And compromising a lot. Over 60% of the plan is made up of tax cuts. Huh?
Local aid package and infrastructure investment: The most important part of the bill, and the one that has the greatest chance of succeeding. Obama's been in trouble recently for remarking that "the private sector is doing fine," when really he meant that the public sector is doing terribly. This portion of the jobs bill attempts to halt government job losses.
Unemployment Benefits: Republicans have been fighting to cut unemployment benefits at every opportunity, as Congress needs to reauthorize benefits every couple of months. Unemployment benefits inject cash directly into the economy, to the people who need it most and the people most disadvantaged by the recession. The American Jobs Act proposes to extend unemployment benefits with a few interesting revisions.
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