President Obama’s speech on job creation today will define three key areas where the Administration wants to indirectly devote part or all of the $200 billion dollars in unexpected TARP savings – small business job creation, infrastructure investment, and “cash for caulkers” clean energy programs.
Senior Administration officials previewed the speech, which is happening at this hour at the Brookings Institution. They said that the reduction in the TARP price tag has provided additional “breathing space” for this kind of investment in job creation, meaning that TARP authority would not be used to directly pay for the measures, but the impact on the budget would be effectively the same. While the officials would not be pinned down on a cost for these measures, one can expect that the provisions would not go above that $200 billion dollar ceiling. Administration officials characterized this as “moving away from helping banks on Wall Street and toward hiring on Main Street.”
The three key areas are:
1) Small Business. There are three ideas in this area. The first is a series of tax cuts to support additional small business investment. These would include an elimination of capital gains taxes for small business in 2010, and extending Recovery Act tax breaks on enhanced expensing provisions and the bonus depreciation tax incentive. Basically, cutting taxes for small businesses.
The second is an additional tax break, that job creation tax credit in 2010, designed “to get job growth more connected to GDP growth.” The left-leaning Economic Policy Institute has a proposal along these lines.
The third is an extension of lending to small businesses, and the money for this could come directly out of TARP. The White House would eliminate fees and raise loan guarantees for SBA loans through next year, something that they said was so successful in the Recovery Act that they ran out of money. They would also ask the Treasury Department to fast-track small business lending through banks.
2) Infrastructure. Under the proposal, a certain amount of additional infrastructure spending above the expected appropriation – $50 billion was the number thrown out by senior Administration officials – would go to infrastructure spending, including highways, transit, rail, aviation and water. Today’s New York Times investigative report about the disastrous nature of the nation’s water treatment systems is just one example of what could be restored with this new spending. Better and cleaner transportation and physical infrastructure systems could be a public health boon as well as a job creator.
The Administration would also set aside a “meaningful portion” of that infrastructure investment for merit-based projects, similar to a program in the Recovery Act called TIGER. This would leverage money with public-private partnerships.
3) Clean Energy. There are two parts to this. The first represents the White House wanting to catch the lightning in a bottle from the cash for clunkers program a second time with something colloquially referred to as “cash for caulkers.” Under this plan, the federal government would encourage energy efficiency retrofits by providing rebates to consumers who partake in them. Senior Administration officials called this a “win-win” idea that would over time save consumers money on energy bills and put people in the construction sector back to work. No numbers were given for this proposal.
The second part would be to build up Recovery Act investments in clean energy which were “over-subscribed,” where more companies offered bids than the money available. The example given was renewable manufacturing, like factories making components that go into wind turbines.
The President will talk about fiscal discipline in his speech, but would stress that additional investment is needed in the near term to “address the unemployment crisis.” Any deficit reduction would happen in the out years. And the President would argue that such deficit reduction starts with the health care reform proposals to stunt the long-term growth in medical inflation.
In addition to these measures, the President is still holding firm to previous ideas to increase the social safety net (extending unemployment benefits, the COBRA subsidy, a $250 one-time payment to seniors and veterans, and relief to local governments). President Obama also announced that he would wind down TARP entirely, though he set no end date for that.
As a snap analysis, some of these programs are decent, though the small business areas are weighted pretty heavily on tax cuts rather than speeding lending. The more radical ideas of direct employment are not here, and I’m unhappy to see aid to local governments, where 900,000 jobs are at stake in 2010 alone, shunted to the side rather than highlighted. Overall, it beats nothing and in some areas could be worthwhile. I’m not sure it’s enough.





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Dregs taste so good when there’s no coffee.
So if the economy does not get better us the federal government would be stuck with these bad loans assuming the banks made these loans?
First he most poor households can’t afford for someone to come caulk their house they also tend to live in the homes that need it most.
Second lots of folks with non construction backgrounds women especially don’t know how to caulk very well if at all.
Third doesn’t caulk work better if not applied when its freezing out?
Any CBO studies saying how many jobs would be created and also how many jobs we expect to lose if Christmas sales are bad and retailers start going out of business?
At the very least we need enough jobs created to offset expected retail job losses.
Just how much savings do we expect from healthcare assuming Harry has a plan he thinks can pass?
How much cash could be heading green energy’s way. Energy is a cost like labor in manufacturing stuff cutting energy costs makes stuff cheaper to build I would rather spend on this than have Obama ask GM workers to give up more pay next year.
“Overall it beats nothing”…. and even then it’s not likely to be everything it’s cracked up to be. Would anyone be surprised if we see less than $30B spent over the next 2 years? That is, unless they come up with a plan to just give money to large corporations for a “promise” to think about hiring.
I think I’m becoming somewhat cynical.
True any bets General Electric takes a bunch of cash and tries to use it to sell Nuclear Plants as green energy?
That could eat a big chunk of the cash Obama is giving out. Or GE could take the cash for their windmills then say their is no demand.
We the government must create demand first.
I want numbers how many jobs will this create.
I need a $42,000 consumer rebate to erect a wind turbine on my property. This would generate plenty of jobs in manufacturing, construction and installation.
But Obama’s vision of energy efficiency retrofits is for me to drive to Home Depot and buy $3.45 worth of caulk.
I think I can cover that on my own, thanks.
That is the best capsule summary of this second stimulus by another name.
This is silly. Everybody knows that the real way to create jobs is to eliminate all taxes on the richest 1% and on corporations, to make homosexuality illegal, to seal the borders and enact TORT REFORM! (Or donut reform if you haven’t got any torts.)
Remember: corporations will take any money you give them and create jobs… unless they don’t, in which case, too bad, this isn’t the USSR, those corporations are under no obligation to provide jobs if they don’t have to, suck it up. Repeat until dead.
The President and Congress think they can “stunt the long-term growth in medical inflation”? That’s rich.
Nice catch about the lending issue. The single greatest action Obama could take that would benefit small business is work with regulators to pressure lenders to start lending to smaller businesses.
Banks are scared to death that their years of negligent risk taking have permanently scarred their financial statements and erased their capital. That was true in housing and credit cards, where lenders pushed credit onto those manifestly unable to repay it, forcing them into default penalties and rates of interest, then selling off the “payment streams” as AAA securities. Banks are trying to recoup some of their losses by creating even more onerous and difficult to understand credit card terms. They are trying to extend their default-rates-of-return business model to all risks, even quality ones.
What that means is that banks don’t want to lend and hold their loans any more. Too slow to generate the outsized returns they and Wall Street routinely expect. But it is the boring old working capital loan that keeps small businesses alive and allows them to grow.
I think the ultimate proposal will land somewhere in between three bucks and 42K.
“though the small business areas are weighted pretty heavily on tax cuts rather than speeding lending. The more radical ideas of direct employment are not here, and I’m unhappy to see aid to local governments, where 900,000 jobs are at stake in 2010 alone, shunted to the side rather than highlighted.”
Are these fucking people retarded, or what? What is this, the stimulus plan of Boehner’s identical twin brother? Jeebuz Xmas…
Sometimes you just have to laugh to keep from going mad. That is very funny…. and true. That’s about the way they view it.
Well not much with any plan I’ve heard however if Americans paid what Mexico and Canada do for drugs then I would expect serious savings from the government, private insurers and consumers which would help the economy.
Probably true.
Years ago I installed a $4K solar water heating system on my house and wrote 40% off my Fed taxes and 25% off my state taxes.
That made the price tag viable and the pay-back time reasonable.
But caulk?
Drugs account for about 10% of US health care costs. If they were all free it couoldn’t reduce health care by more than 10%.
Hospitals and doctors account for over 50%, but nobody’s willing to talk about reducing those costs.
Sure people in Chicago caulking outside in freezing weather they will have to redo the caulking again the spring once the caulk cracks we needed this in fall.
Our Elities don’t work so they have no clue.
Caulk? Reminds me of plastic and tape after 9/11.
Good point.
Do all the work twice, more job creation.
Even a 1% reduction would help more than the current plan. But yes I agree getting hospital costs down would help. How much of that cost is insurance companies delaying payment? My old Chiropractor gave me $10 off each visit cause I paid cash.
My UPS insurance got me glasses in march but my eye doctor was still calling for his bill in august.
2010 is an election year so probably sometime next year but well before the elections, the federal government will extend some emergency aid to the states. It won’t be enough but it is only meant to carry them through the elections.
Coming from you, that is high praise!
True no mention of adding more insulation in homes which along with caulk really helps. Many of the older homes poorer people live in could use some more insulation but that would require more work and real job creation.
Oh joy, McChrystalball and Imaberry are back, this time at a senate hearing. I can count on one hand the number of sensible Qs they were asked at the house hearing this morning.
Well, perhaps the caulk is meant to cover the holes in O’s jobs program.
Obama is from Chicago engine blocks crack in uninsulated garages there when it gets really cold if you don’t change the engine coolant to + minus 20 protection granted over heating an engine on long trips becomes a problem.
However a warm garage acts as a buffer from the cold saving you heat and the bill for a new engine.
You can’t caulk cracks that big:)
i wouldn’t focus on the catch-phrase they’re clearly pushing to mirror cash for clunkers. The proposal is not to pay you to caulk your house. It’s to pay rebates to hire contractors for full energy retrofits – windows, insulation, new drywall, or any of 100 other things.
Actually my Mom gets clear plastic sheets and tape over the inside of her windows in winter. I am surprised Obama is not selling the Bush idea of plastic sheets and duct tape.
Well, the catch phrase was tailor made for mockery.
Yes. I also understand that a large chunk of the original stimulus cash is due to hit in the first quarter. Tack that onto the $200B and it might make for a bit smoother sailing into November, 2010. On the other hand, I read something this morning to the effect that the Afghan quagmire is expected to get pretty nasty (read: bloody) next year. What a mess…
Middle class welfare who helps the poor who really need it and where most of the energy loss is? The just bought a new home in the housing bubble middle class probably don’t need new caulk on their homes yet.
I expect this from Republicans giving cash to those who don’t need it for a job that does not need to be done.
Spend the money on poor homes they tend to need it most and that cuts down every bodies energy bill more.
Plus it puts more cash in poor folks pocket which can be spent on the economy. A five year old home however probably won’t get much heat savings from new caulk.
Why will Afghanistan get worse?
I wonder if the GOP told Obama any plans to help the poor directly will be filibustered?
Anyone to blindly trust government generated statistics needs their heads examined.
“Even as the BLS and the administration are trying to cover up the real state of unemployment affairs using assorted semantic gimmicks of just what it means to be unemployed, and as companies provide adjusted EPS numbers, while actual earnings continue to collapse, the true barometer of spending, provided by the Financial Management Service, tax withholdings (net of refunds), continues to paint the truest picture of just what is really happening with both America’s consumer and the corporate world. And it ain’t pretty…..”
http://www.zerohedge.com/article/collapse-tax-withholdings-refutes-improvements-either-unemployment-or-corporate-profitabilit
20 Trillion to Banksters vs. 200 Billion into the Real Economy. What are they thinking?
More important, it’s not cost-effective for an individual to have a $42,000 facility — it can never pay for iteself. But lots of $3.45 tubes of caulk will.
First, because McChrystal wants to go all out to fight the Taliban. It is idea of changing the dynamic of the conflict. Second, because the Taliban knows that 2010 is an election year and that anything they do will have its biggest impact in the runup to the elections. The ordinary fighters might not know this, but their leaders almost certainly do.
In the face of entrenched opposition you were expecting more?
Wanting to do something is one thing, getting it done is an entirely different matter. You only need to look at the Health Care Debate as it moved from Single Payer/Medicare For All to Public/Private Exchange combined with a lowering of age requirement for Medicare and a increase in the income cap with Medicaid.
So basically what is “Politically Possible” is the only answer to many of this countries serious problems. This is because the media is mainly interested in nonsense like how many women Tiger Woods has banged behind his wife’s back…
These are all good ideas, but far from Progressive ideas needed to really put this country on the path it needs to follow and why we elected Obama to start with.
Year One – Roll Out Ambitious Plans, get maybe 50% of it done
Year Two – Fortify Ambitious Plans, get an additional 10% because Congress is now focused on re-election
Year Three – White House is now focused on tactics for re-election
Year Four – If re-election is successful, next four years will be spent building legacy and getting little else done, haven’t you seen the pattern before?
We need to get state money now. It’s already a disaster, and with budgets rolling out, States are making insane cuts… on top of having just made cuts.
Why is it taboo for Obama to talk about aid to states?
John
It doesn’t have to pay for itself, Obama will pay for it.
This is a JOBS program.
Lets see how long the IDIOT REPUBLICANS HOLD THIS UP.
If something isn’t done to extend unemployment buy the end of the year there will be millions with absolutely nothing coming in. Which means more foreclosures.
From a poet/house-painter, well said! There’s more to weatherizing than caulking.
I just met with a bankruptcy attorney. After I file in February, I’m looking forward to turning into a home weatherization tech. There already are certificate programs available.
Here on Whidbey Island (north of Seattle) we had record high temps, in the mid 90s; that kind of extreme weather event cracks a lot of seals. Y’all might want to check your own homes.
Weatherizing can include replacing windows and siding, then painting. (Siders typically do the caulking.) A job like that would cost the homeowner about 5-15K. I’m also looking at installing solar panels.
As TCU points out, many people whose homes need the weatherizing most can’t afford it. Apartment buildings could have been designed with solar, but then the power companies would lose all those cash cows.
Our buildings (speaking locally) weren’t designed or built to be self-sufficient. But that’s also a structural, systemic problem, right?
Same goes for us as citizens: we’re raised to be loyal subjects instead of self-sovereign citizens. We should be marching on Washington and Wall Street, instead of meekly sucking their dregs (I liked that one too, eCAHNomics).
How’s this for a slogan: “Got drafts? We got caulk.”
Lets take all the unemployed heavy equipment operators,and hand them caulking guns Mr Obama.I don’t think so.You better have a better jobs plan than that.Chaulking guns and duct tape.Wow how long have you been working on that?Well maybe after we reinsulate all the homes with new insulation,and all the workers breathe all the glass particles,that will give all the new health care workers job security.Good thinking !!When I signed up for unemployment,the first and only time ever,in the late 70″s,because of a two week shutdown at the Leather Tannery I was working.We were allowed to be on unemployment for up to 13 weeks.That was it!!!they keep extending unemployment!Get out and find a job!They say that they can’t find a job,there is work out there if you want to work,We had plants close around here,but we all found new jobs.It might not have been the best jobs,but it was work,and you have to start somewhere.And work your way up.I think today the young people are soft,everyone wants the government to take care of them,find them good jobs ,give them better insurance,make sure they have new housing,make sure they have modern transportation,I have lost all faith in our government.The hoodlums that are in our house and senate,are pathetic,I watched Cspan the other day, and I was amazed, I swear,it was after a three Martini lunch.The senator from Montana was slurring his words,and giggling.WOW.I think if this country continues down this road,we are all in for a rude awakening.Can you speak chinese?
Obama is from Chicago engine blocks crack in uninsulated “garages” there when it gets really cold if you don’t change the engine coolant to + minus 20 protection granted over heating an engine on long trips becomes a problem.
However a warm garage acts as a buffer from the cold saving you heat and the bill for a new engine!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!What kind of thinking is this?YOU HAVE TO INSULATE YOUR GARAGE.I think antifreeze is cheaper than heating a garage,for the winter.UNINSULATED GARAGES!!!!!!!OBAMANOMICS
Obama is from Chicago engine blocks “crack” in uninsulated “garages”.”I think something is cracked alright.Or someone is on crack.Maybe its from all the bullets in the city?We live in Northern Maine,And I have never heard of your engine block cracking from the cold.But we do use “antifreeze”.It must be a city thing?”
If George W. Bush had been the first President to need a teleprompter installed to be able to get through a press conference, would you have laughed and said this is more proof of how he inept he is on his own and is really controlled by smarter men behind the scenes?Think about it ?
my president is an idiot.
1) deficit reduction is suicidal at this point with high unemployment, low factory utilization, high private sector debt, current account deficit (and $ global reserve currency).
2) the healthcare reform proposed so far does not control costs (per cms).
the only question i am left with is this. is our current president as big an idiot as our previous one?
Ya Know what the best thing for the deficit is, put the Country back to work.
Just like always they talk that tax cuts will create jobs, not thinking that people would hire if they had increased business, even with high taxes.
The best thing for small and large business is that everybody is working, making money, spending it, and creating business for those business’s.
Nobody is going to hire someone to get a tax cut, unless they really have the business to need that person.
Why does it cost this administration $533,000.00 to produce one job?Give me $533,000.00 and I will produce more than one job.This country has lost its ability to produce anything,at a reasonable cost.All our manufacturing capabilities,have been shipped over seas.If we ever have a real war, we will not be able to produce the arms needed to win.We have lost our ability and workforce,all we produce in this country now is paper pushing jobs.Nothing is made here anymore.Obama’s job plan to give people caulking guns,is fine but what about the southern half of this country?They don’t need caulking and duct tape.A few years ago,we were all told that americas bridges were falling down!Why don’t we fix some of them?I know that the bush admin didn’t fix them all.