The House GOP leadership has written a memo to their caucus picking and choosing what they would be willing to support in the American Jobs Act. The numbers come out to support for 1/44th of the overall price tag, about 2% of the total bill.
As you may know, the AJA is comprised of about 57% tax cuts and 43% spending initiatives. So in the main, House Republican leaders tossed out the spending and embraced a few of the tax cuts. They also rejected the tax hikes on corporations and the wealthy to pay for the bill.
John Boehner, Eric Cantor, Kevin McCarthy and Jeb Hensarling, who wrote the memo, took advantage of the President’s backtracking of an “all or nothing” approach to the bill, and stressed “areas of common agreement” in the plan. Here’s what they picked out (White House estimated cost in parentheses):
• Extending the 100% bonus depreciation for business, basically a tax break on capital purchases. ($5 billion)
• Expanding incentives for hiring veterans, in the form of a tax credit to business. The GOP wants to actually build on this and add education and job training assistance to it. (n.a.)
• Georgia Works-style programs for job training for the unemployed. I’ve noted on a couple occasions the concern with this approach. “While the President links these reforms to a blanket extension of extended (up to 99 weeks) UI benefits and new federal spending, there is no reason we cannot move forward on these areas of agreement,” the memo says. In other words, ditch the extension of UI and just institute Georgia Works. ($5 billion)
There’s also a discussion of infrastructure funding, but it’s shut down by saying that “adding more money to the same broken system is more likely to produce waste and inefficiency than meaningful results.” So all they want to do is “reform” the current system with no new money in an attempt to get money into job sites faster. And the methods are the typical regulatory waivers we’ve come to expect from Republicans, along with a take-up of Tom Coburn’s idea, which almost allowed the FAA authorization to expire, to set aside the 10% mandate for spending on “enhancements,” which include bike safety and other priorities.
On the payroll tax cuts, the single largest element of the American Jobs Act, GOP leaders twist themselves in knots coming out against a tax cut. They say that because it’s temporary, it will lead to a larger tax increase when it ultimately expires. They link the limit on itemized deductions to it for no real reason other than they’re both in the bill, and say this would hurt charities and churches. And they link the expiration to the Bush tax cuts to it for no reason whatsoever. They close with a CYA take:
House Republicans are supportive of tax relief for working families and small businesses, but the temporary relief proposed by the President must not cause unforeseen harm to the economy 15 months from now and it shouldn’t be offset with permanent tax increases; and it shouldn’t come at the expense of the nation’s charities. That said, a commitment to honest and fruitful discussions between the White House and Congressional Leaders could lead to potential bipartisan agreement on a plan that avoids these downsides and provides tax relief for the middle class that encourages short- and long-term economic growth and job creation.
I don’t really know what that means, but it doesn’t sound like there would be any agreement on it, if they don’t want to cause “uncertainty” 15 months down the road. I guess they only want the uncertainty to crop up 3 months down the road.
The only other “areas of agreement” on the American Jobs Act cited by House GOP leaders are things not in the American Jobs Act, like withholding 3% of payments from contractors until services are provided, or “reducing regulatory burdens on small business capital formation” (there’s a crowdfunding piece in the AJA, but it’s really a micro-idea), and pending free trade agreements. The memo outright rejects aid to state and local governments, school construction, the Neighborhood Stabilization Fund, and all the pay-fors. And they used the carping from Congressional Democrats as a reinforcement of their positions.
If you go back to the White House fact sheet on the American Jobs Act, the three programs they support – business expensing, incentives for hiring veterans and the Georgia Works-style UI program, represent $10 billion of the $447 billion bill. The veterans’ hiring initiative is given an “n.a.” in the White House fact sheet, but it would cost money to deliver tax credits of between $5,600-$9,600. I don’t really know how to model that, but let’s be hugely generous and say that leads to the hiring of 100,000 veterans. That would cost roughly another $760 million.
So at best, you’re talking about a $447 billion jobs bill whittled down to no more than $11 billion. The memo closes by saying that “We are, however, committed to passing legislation to implement the policies in the areas where agreement can be found to support job creation and long-term economic growth.” With these numbers, I’m not sure why they’re even bothering.