Political News Updates by James Catledge

The following is a summary of the major provisions of the “American Jobs Act,” released by the White House on Monday, September 12, 2011.  According to the White House, the bill would increase deficits by $447 billion over ten years to pay for temporary stimulus spending, new job training programs, unemployment insurance, and temporary tax reductions.  To offset the cost of the legislation, the bill includes an estimated $467 billion in permanent tax increases, according to the White House.

Title I—Tax Relief for Workers and Businesses

Subtitle A—Payroll Tax Relief

• Temporary Payroll Tax Cut for Employers, Employees, and the Self-Employed: The bill would expand a current payroll tax cut for employees and establish a new payroll tax cut for employers in calendar year 2012.  Payroll taxes paid by employees would be reduced from 4.2 percent to 3.1 percent.  Payroll taxes for employers would be reduced from 6.2 percent to 3.1 percent on their first $5 million in payroll.  The bill would transfer funds from general revenues to the Social Security Trust Fund to make up for the revenue shortfall.   According to the White House, the reduction in payroll taxes for employers (in combination with the payroll tax holiday for new wages described below) would increase deficits by $65 billion over ten years.   The expansion of the payroll tax reduction for employees would increase deficits by $175 billion.

• Temporary Tax Credit for Increased Payroll:  For the last quarter of 2011 and for calendar year 2012, the proposal would provide a payroll tax credit that fully offsets the employer social security tax that otherwise would apply to increases in wages from the corresponding period of the prior year.   The bill would transfer funds from general revenues to the Social Security Trust Fund to make up for the revenue shortfall.

Subtitle B—Other Relief for Businesses

• 100 Percent Bonus Depreciation:   The bill would extend the ability of businesses to deduct 100 percent of the cost of qualified property through the end of 2012.  According to the White House, this provision would increase the deficit by $5 billion.

• Surety Bonds: The bill would temporarily increase the size of contract surety bonds that the Small Business Administration (SBA) can guarantee from $2 million to $5 million, through FY 2012.  The bill provides $3 million in mandatory funding for the Surety Bond Guarantees Revolving Fund to cover the estimated cost of this section.
• Delay in Application of Withholding on Government Contractors:  The bill would delay the effective date of the requirement that governmental entities withhold 3 percent from payments to persons providing certain property or services through 2013.

Title II—Putting Workers Back on the Job While Rebuilding and Modernizing America

Subtitle A—Veterans Hiring Preferences

• Wounded Warriors Work Opportunity Tax Credits:   The bill would provided employers that hire veterans who have been unemployed for at least 6 months and have a service-connected disability with a tax credit of up to $9,600.  The bill would also create two new hiring credits for all other veterans.  The first is a credit of $2,400 for employers that hire veterans who have been unemployed for at least 4 weeks.  The second is credit of $5,600 for veterans who have been unemployed for at least 6 months.

Subtitle B—Teacher Stabilization

• The bill would appropriate $30 billion to provide grants to states, based on population, to prevent teacher layoffs.  The bill would authorize states to reserve 10 percent of their grants for state-funded preschool programs and to reserve 2 percent for administrative costs.  The bill would require participating states to maintain support for early childhood, elementary, and secondary education and public institutions of higher education at the same level of support as the previous fiscal year or higher, effectively prohibiting reductions in state education spending.   According to the White House, teacher rehiring and first responder programs (described below) will total $35 billion in spending over ten years.

Subtitle C—First Responder Stabilization

• The bill would provide $5 billion for competitive grants to states to prevent layoffs and pay for the hiring of law enforcement officers and other first responders.  According to the White House, teacher rehiring and first responder programs will total $35 billion in spending over ten years.

Subtitle D—School Modernization

• Elementary and Secondary Schools:  The bill would provide $25 billion in grants to states, based on population, to provide assistance for the modernization, renovation, and repair of elementary and secondary school buildings in public school districts across America.  The bill would allow certain private, nonprofit elementary or secondary schools to be eligible to receive program services for limited purposes, including meeting requirements of the Americans with Disabilities Act.  According to the White House, school modernization programs will total $30 billion in spending over ten years.

• Community College Modernization:   The bill would provide $5 billion for the Secretary of Education to award grants to states to modernize, renovate, or repair existing facilities at community colleges.   According to the White House, school modernization programs will total $30 billion in spending over ten years.

Subtitle E—Immediate Transportation Infrastructure Investments

• The bill would provide $2 billion for airport development grants.
• The bill would provide $1 billion to conduct research and development and demonstrations and to acquire, establish, and improve FAA air navigation facilities.
• The bill would provide $27 billion for highway restoration, repair, and construction projects, as well as passenger and freight rail transportation projects, distributed via formulas that were also utilized under the Democrats’ “stimulus.”
• The bill would provide $4 billion for existing intercity passenger rail networks and develop new high speed rail corridors.

• The bill would provide $2 billion to Amtrak for the repair, rehabilitation, and upgrade of Amtrak’s assets and infrastructure.

• The bill would provide $3 billion for transit capital projects, particularly for the purchase of new buses and for the repair and rehabilitation of existing rail and bus systems.

• The bill would provide $6 billion for capital projects to modernize existing fixed guideway systems and to replace and rehabilitate buses and bus facilities.

• The bill would provide $5 billion to award grants on a competitive basis for projects across all surface transportation modes that “will have a significant impact on the Nation, a metropolitan area or a region.”  This provision would require the Secretary of Transportation to publish criteria on which to base competition for the grants within 90 days of enactment, with priority for distribution of funds given to projects expected to be completed within three years of the date of enactment of the Act.

• According to the White House, transportation and infrastructure programs will total $50 billion in spending over ten years.

Subtitle F—Building and Upgrading Infrastructure for Long-Term Development

• Establishment of the American Infrastructure Financing Authority (AIFA):  The bill would establish the American Infrastructure Financing Authority (AIFA)—also referred to as the “infrastructure bank”—as a wholly-owned government corporation that will provide direct loans and loan guarantees to facilitate investment in “economically-viable” infrastructure projects of regional or national significance.  AIFA’s Board of Directors would consist of seven voting members, each of whom will have an equal vote and all of whom will be appointed by the President with the advice and consent of the Senate. The bill would also establish a non-voting CEO of the AIFA, responsible for appointing senior management (subject to Board approval), hiring and terminating all other AIFA personnel, overseeing AIFA’s involvement in the funded projects, and assessing and recommending in the first instance (subject to ultimate approval or disapproval by the Board) the compensation of all AIFA personnel.

• Terms and Limitations on Direct Loans and Loan Guarantees:  The bill would state that financial assistance shall not be provided for any project whose purpose is private and for which no public benefit is created.  An eligible project has a cost that is reasonably anticipated to equal or exceed $100 million, with the exception of rural projects.   The maximum amount of new direct loans and loan guarantees in AIFA’s first two fiscal years is limited to $10 billion each year. This increases to $20 billion per year after the second year of operations and through the ninth year, and increases to $50 billion per year after the ninth year of operations.  The CEO of AIFA will establish a repayment schedule for each direct loan, with the repayment commencing no later than five years after the date of substantial completion.

• Funding of AIFA:  This bill would authorize and appropriate $10 billion, which is to remain available until expended, to provide loan guarantees.  Portions of these funds would be set aside in the early years for administrative costs.  According to the White House, the infrastructure bank will cost $10 billion over ten years.

Subtitle G—Project Rebuild

• The bill would provide $15 billion for “Project Rebuild,” a new program to make federal grants to rehabilitate and refurbish vacant and foreclosed homes and businesses.  Under the bill, two-thirds of the funds would be allocated by formula to states and local governments and one-third would be allocated competitively to all types of eligible entities.  The bill would require that all funding must be obligated by HUD within 150 days, and that eligible entities would have a goal of expending 100 percent of funds within 3 years of receipt by the grantee.  The bill would also provide a minimum of $20 million for each state.  According to the White House, rehabilitating vacant property will total $15 billion in spending over ten years.

Subtitle H—National Wireless Initiative

• Auctions of Spectrum and Spectrum Management:    The bill would reallocate the D Block spectrum for a national broadband public safety network (costing $3 billion) and provide funding to support the deployment of this network and technological development to tailor the network to meet public safety requirements.  In addition, the bill would authorize the FCC to hold incentive auctions, where non-government holders of spectrum will be reimbursed for its value from a portion of auction proceeds in return for voluntarily relinquishing their spectrum rights.  According to the White House, the proposal has a gross cost of $10 billion, but a net deficit reducing impact of $18 billion because of spectrum auction proceeds.

Title III—Assistance for the Unemployed and Pathways Back to Work

Subtitle A—Supporting Unemployed Workers

• Extension of Emergency Unemployment Compensation Program: The bill would provide for the extension of emergency unemployment compensation benefits.   The bill would extend the emergency unemployment compensation (EUC) program for individuals to enter the program (upon exhaustion of regular unemployment compensation (UC) payments) by one year to January 3, 2013. It also would extend the transition period so individuals would be permitted to continue to receive amounts remaining in their EUC accounts until June 8, 2013.  The bill would extend 100 percent Federal funding of most extended benefits (EB) by one year to January 4, 2013. It also would extend the transition period by one year so 100 percent federal funding of EB would continue until June 11, 2013, for individuals who started receiving EB before January 4, 2013.  According to the White House, the extension of Unemployment Benefits would cost $49 billion over ten years.
• Reemployment NOW program:  The bill would appropriate $4 billion for the establishment of the Reemployment NOW program, which would facilitate the reemployment of individuals receiving emergency unemployment compensation.  Under the program (which is based on the Georgia Works! Program and other state programs), eligible individuals would have the option to engage in short-term work experiences with an eligible employer while receiving unemployment benefits.  During participation in the bridge to work program, an individual receiving EUC would 1) continue to receive EUC as wages for work performed for the participating employer;  2) receive any augmented wages, if applicable; and 3) could be paid compensation by a participating employer or by a state that is in addition to EUC and augmented wages paid.

Subtitle B—Long-Term Unemployed Hiring Preferences

• The bill would make employers eligible for a maximum tax credit of $4,000 if they hire individuals who have been unemployed for at least 6 months. This credit is also made available to tax-exempt entities and public universities. Finally, this section authorizes the Secretary of the Treasury to provide alternative methods for certifying an individual’s unemployed status.   According to the White House, the proposal would increase the deficit by $8 billion over ten years.

Subtitle C—Pathways Back to Work

• The bill would establish a $5 billion fund to support subsidized employment opportunities, summer and year-round youth employment, and work-based training and education programs for unemployed, low-income adults and low-income youth, known as “The Pathways Back to Work Fund.” According to the White House, the proposal would increase spending by $5 billion over ten years.

Title IV—Offsets

Subtitle A—28 Percent Limitation on Certain Deductions and Exclusions

• The bill would limit the value of all itemized deductions and certain other tax expenditures for certain taxpayers by limiting the tax value of otherwise allowable deductions and exclusions to 28 percent. Taxpayers with adjusted gross income over $250,000 for married couples filing jointly (or $200,000 for single taxpayers) would be subject to this limitation. The limitation would affect itemized deductions and certain other tax expenditures that would otherwise reduce taxable income in top two tax brackets.  This section would be effective for taxable years beginning on or after January 1, 2013, and would be a permanent tax increase used to offset temporary spending and tax cuts.  According to reports, this provision would increase taxes by $405 billion over ten years.

Subtitle B—Tax Carried Interest in Investment Partnerships as Ordinary Income

• The bill would tax as ordinary income, and make subject to self-employment tax, a service partner’s share of the income of an investment partnership attributable to a carried interest because such income is derived from the performance of services.  Under current law, service partners are allowed to receive capital gains treatment on labor income without limit.  Essentially, this provision would treat carried interest earned by investment fund managers as ordinary income rather than taxing it at capital gains rates, which would increase taxes by $18 billion.

Subtitle C—Close Loophole for Corporate Jet Depreciation

• The bill would require corporate jets to be depreciated over the same number of years as other aircraft.   Current law contains a provision that allows corporate jets to be depreciated faster than passenger airliners.  This section would be effective for taxable years beginning after December 31, 2012, and would increase taxes by $3 billion over ten years.

Subtitle D—Repeal Oil Subsidies

• The bill would repeal a total of eight tax deductions specifically designed for oil and gas production.  According to reports, this provision would increase taxes on energy production and distribution by $41 billion over ten years.

Subtitle F—Increased Target and Trigger for Joint Select Committee on Deficit Reduction

• The bill would enact offsets to pay for the provision in the bill that increase the deficit, either through new spending or revenue reductions.  Under the bill, if the Joint Select Committee on Deficit Reduction achieves additional savings in the amount of the cost of these deficit-creating provisions, the offsets contained in the bill would not take effect. The bill would amend the Budget Control Act of 2011 to increase the $1.5 trillion deficit reduction target of the Joint Committee by the cost of this bill, or $447 billion according to White House estimates.  The bill would further amend the Budget Control Act to specify that if the Joint Committee exceeds the $1.2 trillion in deficit reduction necessary to avoid sequestration by the cost of the provisions in this bill, then the offsets in Title IV of this bill will not take effect.  This increased amount would be revised based on the final score of the bill.  However, the bill would not affect the existing requirement in the Budget Control Act for sequestration if the Joint Committee does not hit its minimum deficit reduction target of $1.2 trillion.

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By Chris Moody

When President Obama delivers his address on a new job-creation plan to a joint session of Congress on Thursday, he won’t be speaking to a sold-out crowd. Several lawmakers are still determining whether it is worth their time to stay in Washington to hear the president, and some are already planning to skip it.

Louisiana Republican Sen. David Vitter is the latest to announce that he will not be there, choosing to attend a party to watch the New Orleans Saints’ opening football game instead.

“As a fanatic, I have my priorities,” Vitter told Fox News on Wednesday.

Republican Rep. Paul Broun of Georgia will also skip the address but will watch it from his office across the street. During the speech, Broun will post his comments about Obama’s remarks on Twitter, a tradition he keeps during State of the Union addresses.

“Dr. Broun will not be attending President Obama’s joint address, but he looks forward to hearing the president’s proposal for job creation,” Broun spokeswoman Meredith Griffanti told The Ticket. “Dr. Broun will instead watch the speech from his office where he will host a live town hall via Twitter to interact with his constituents.”

Broun remained in his office during Obama’s State of the Union address in January, providing his own commentary on the social networking website throughout the speech.

“Mr. President, you don’t believe in the Constitution. You believe in socialism,” one of Broun’s tweets read.

Illinois Republican Rep. Joe Walsh was the first to announce his intentional absence last week, saying he didn’t want to act as a “prop” for Obama’s speech.

South Carolina Sen. Jim DeMint, a member of the Senate Tea Party Caucus, told Jon Karl of ABC News that he “probably” won’t show up either.

“If he sent a written proposal over first, I would go hear him explain it, but frankly right now I’m so frustrated I don’t think I’m going to go,” DeMint told ABC News. “I can’t imagine too many Americans wanting to hear another speech with no real plan attached.”

There’s also a chance that Florida Sen. Marco Rubio won’t be there, but his absence would have nothing to do with politics: Rubio’s mother has fallen ill after suffering a series of recent strokes. The freshman senator’s schedule this week is “fluid” because of his mother’s health, a spokesman from Rubio’s office said.

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Thirty-two months into his presidency, and 31 months after he signed the failed $1 trillion “stimulus” bill, President Obama was on the trail touting a new, undisclosed jobs plan.  After spending the majority of his time and energy on a government takeover of health care and spending money we don’t have, the president suggests that his is finally ready to pay attention to the nation’s 9.1 percent unemployment rate. Unfortunately, the president continues to ignore the House Republican plan to create jobs and it’s clear the that president is determined to increase spending, pile on more debt, and increase taxes on families and small businesses.  Here’s where the president’s economic policies have gotten the country so far:

Worst Unemployment since the Great Depression: Unemployment now stands at 9.1 percent, which is significantly higher than the 7.8 percent rate when the president took office and higher than the 6.7 percent rate the administration promised unemployment would be if the failed stimulus became law.  Unemployment has been above 8 percent for 30 months—the longest streak since the Great Depression.  From March 2009 (the month after the stimulus became law) through July 2011, unemployment has averaged 9.4 percent.

Stagnant Economic Growth:  According to the Bureau of Economic Analysis, growth in the U.S. has slowed to an anemic pace.  In the second quarter of 2011 growth was estimated at 1.3 percent and the growth rate for the first quarter of 2011 was downgraded from 1.9 percent to 0.4 percent.  Since the latest recession ended in June of 2009, growth has averaged just 2.4 percent, which is far too slow to replace the 3.1 million jobs that have been lost since January 2009.  By comparison, in the eight quarters following our nation’s last deep recession which ended in November of 1982, growth averaged 6.3 percent each quarter.

Small Business Optimism Reaches 10-Month Low:  According to the National Federation of Independent Business’ (NFIB) August 2011 Small Business Economic Trends report, optimism among small business owners that the economic outlook will improve in the short term fell to its lowest level since September 2010 and has declined for five straight months.  The report also shows that just 2 percent of small businesses plan on adding jobs over the next three months.  According to the NFIB, “considering the confidence-draining performance of policy makers, there is little hope that Washington will stop hemorrhaging money and put spending back on a sustainable course.”

The Republican Plan for Job Creation and Growth

House Republicans have a plan to create jobs and restore confidence and certainty to the economy.  The House Republicans plan includes a budget that would protect America’s entitlement programs from bankruptcy (without tax hikes), a Plan for America’s Job Creators that would provide a better environment for private-sector job growth, and a Balanced Budget Amendment to the Constitution so Washington will be required to live within its means. In addition, there are over a dozen other jobs bills approved by the House which have stalled in the Democrat senate. Unfortunately, the 13.9 million unemployed Americans have been ignored by the President and Democrats in Washington.  Republicans are committed to creating jobs, getting our nation’s fiscal house in order, and restoring economic certainty for long-term growth and prosperity for every American.

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In what can only be described as a triumph of bad policy and craven politics, Congress and the Obama administration have spent the year focused on budget cuts, as the economy has faltered and unemployment has worsened. Official unemployment is 9.1 percent, but it would be 16.1 percent, or 25.1 million people, if it included those who can only find part-time jobs and those who have given up looking for work. For the past two and a half years, there have been more than four unemployed workers for every job opening, a record high, by far. In a healthy market, the ratio would be about one to one.

By a large margin, Americans have told pollsters that job creation is more important than budget cuts. Yet Republican leaders are wedded to austerity and appear to think that high unemployment will hurt President Obama politically more than it will hurt them, so they will likely resist efforts to create jobs, no matter how great the need.

Without more jobs, both the economy and the budget will deteriorate further. It is past time for Mr. Obama to send a jobs plan to Congress that has popular appeal, one that he can use to try to shame Republicans. He will need cooperation from the Senate, which should bring one jobs-related bill after another to the floor, forcing its members to approve jobs initiatives or go on the record to show that they just don’t care.

Mr. Obama has begun to talk more about jobs, but his agenda is thin. Its main components — extending federal unemployment benefits and the payroll tax cut beyond their expiration at the end of this year — are vitally important, but their extension will only maintain the status quo. His idea for an infrastructure bank to finance large-scale building projects is also good, but would take time, and would not address the immediate need for jobs. Ditto his push for patent reform and trade agreements.

There are other ideas worth fighting for. Take, for example, Fix America’s Schools Today, or FAST, an idea that has been incorporated into a House proposal to be introduced this fall by Jan Schakowsky, Democrat of Illinois. Public school buildings in the United States are on average over 40 years old and in need of an estimated $500 billion in repairs and upgrades. A $50 billion school renovation program would employ 500,000 workers (1.5 million construction workers are currently unemployed) and could be easily scaled up. The money could be disbursed through existing federal formulas to all 16,000 public school districts. The initial cost could be largely offset over 10 years by ending tax breaks for fossil fuels, as called for in Mr. Obama’s 2012 budget.

Other programs in the Schakowsky bill could employ an estimated one million young people for projects in federal parks, community centers and on college campuses, as well as 350,000 laid-off teachers, police officers, firefighters and health care providers.

Washington, in thrall to austerity, has abandoned one of the most immediate and powerful tools for supporting growth and jobs, namely, borrowing at today’s low rates to provide direct fiscal aid to states. But Mr. Obama can and should make the case for targeted new jobs today, to be paid for over time by closing tax loopholes.

Republicans are sure to howl that new programs will undo the debt ceiling deal, but it is surely possible over a 10-year period to tackle near-term action on jobs and long-term action on deficit reduction. The alternative is even slower growth and higher unemployment.

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Entrepreneurs, workers, and the general public have been hopeful that the damaged economy would recover and we all could publicly announce that the recession was over.  The article featured below communicates the numbers that characterize the current state of the economy.  The unemployment rate is, unfortunately, not dropping as we all had hoped.  Feel free to leave your own public comment and tell me your thoughts about the unemployment numbers.

After more than two and a half years of the Obama Administration’s destructive policies—including the constant threat of higher taxes, excessive regulations, and record spending—unemployment remains staggeringly high and is actually getting higher.  Today’s labor report reiterates a sad fact that Americans already know:  the economic recovery has stalled and President Obama’s economic policies have failed.

• 9.1%:  The unemployment rate for the month of July, the second highest level in 2011 and the 25^th out of the last 27 months that unemployment has been at or above 9 percent.  From March 2009 (the month after the stimulus passed) through July 2011, unemployment has averaged 9.4 percent.  Prior to President Obama taking office, unemployment had not been above 9 percent in 28 years.

• 30:  The number of consecutive months the unemployment rate has been at or above 8 percent—the level the President said unemployment would never reach if the stimulus passed.  Unemployment has not been above 8 percent for 2 ½ straight years since the Great Depression.

• 13,931,000:  The number of unemployed Americans looking for work in the month of July, the second highest number of unemployed workers of any month in 2011.  The number of unemployed eclipsed 13 million for the first time in history two months after President Obama took office and has remained above 13 million for 29 straight months.

• 45,753,078:  The number of Americans receiving food stamps, the highest number of recipients in history.  Today, 14 percent of Americans receive food stamps, an increase of 40 percent since President Obama took office.

• 40.4:  The average number of weeks it takes for job seekers to find a job—the longest average time that Americans have been unemployed since the statistic was first recorded in 1948.

• 8,396,000:  The number of Americans who are working only part-time because they cannot find full time employment.  The number of people working part time for economic reason reached 8 million for the first time in history under President Obama and has remained above 8 million for 30 consecutive months.

• 6,185,000:  The number of Americans unemployed and searching for work for more than 27 weeks.  Since President Obama took office, the number of people unemployed for more than 27 weeks has increased by 130 percent.

• 1,270,000: The number of job seekers that are new to the workforce and have yet to find a job.  The number of new workers who cannot find a job has been above 1 million for two years.

• 25.0%: The unemployment rate among job seekers between the ages of 16 and 19.  Youth unemployment has been above 24 percent for 26 months, the longest streak since the Great Depression.

• 15.9%: The unemployment rate among African Americans, an increase of 25 percent since President Obama took office.

• 11.3%: The unemployment rate among Hispanics and Latinos, an increase of 14 percent since President Obama took office.

• 15.0%:  The unemployment rate among Americans without high school diplomas, an increase of 22 percent since President Obama took office.

• 6.7%: The level at which the Obama administration claimed unemployment would be today if the “stimulus” was signed into law.

• 1,647,000: The number of net jobs the economy has shed since the Democrats’ “stimulus” was signed into law in February 2009.

• $1,161,000,000,000:  The total cost of the Democrats’ “stimulus.”  CBO estimates the cost of the bill will reach $821 billion and interest on the debt for the bill will be at least $347 billion.

• Entrepreneurship is at a 17-Year Low:  Since 2007, there has been a 23% drop in new business creation – falling to the lowest levels seen since 1994.

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