Original Post
September 7, 2011
by Jim Hand
Obama's plan to be challenged by Republicans
President Barack Obama and the U.S. Chamber of Commerce rarely agree on anything, but they both want the country to embark on a major rebuilding of its infrastructure.
In their view, rehabilitating deteriorating bridges, highways and train tracks would not only make the country more efficient, it would create badly needed jobs.
The chamber said so in a proposal Tuesday. Obama is expected to re-enforce the point in a jobs speech Thursday.
There is just one problem - congressional Republicans have already rejected the idea, saying the country cannot afford it.
The chamber and most Republicans, however, are on the same page when it comes to wanting free trade agreements with South Korea, Colombia and Panama to be ratified, saying they will create jobs by boosting exports. There is just one problem - congressional Democrats oppose the agreements as they now stand, saying changes are needed to protect jobs from being exported along with products.
That is the dilemma Obama faces Thursday as he goes before Congress and the nation with ideas of how to boost the economy and stimulate job growth.
The partisan divide in Washington has grown so large that it will be a struggle to get even the smallest of a jobs bill passed.
Brian Gilmore, president of Associated Industries of Massachusetts, said the gridlock in Washington has not only brought governing to a halt, it has cast a pall over the economy by creating a great sense of uncertainty.
The near collapse last month of talks to prevent a government default and extend the federal debt limit is an example.
"The partisan bickering and grandstanding really has to stop," he said. The partisanship was never clearer than on the president's proposal to extend a payroll tax holiday that has lowered the amount of Social Security taxes workers pay, putting an average of $1,000 in family pocketbooks this year.
The tax cut is set to expire at the end of the year. The president wants to extend it and is reportedly considering proposing to expand it to employers and employees.
U.S. Sen. Scott Brown, R-Mass., is backing the idea, although many in his party are not.
"Senator Brown supports extending the payroll tax cut and believes it is an important boost for middle-class taxpayers and for job creation. He also looks forward to reviewing proposals that would extend it to the employer side," a spokesman said.
The Republican leadership, which usually favors tax cuts, this time is opposed.
Sen. James DeMint, R-S.C., said the tax cut has not worked so there is no reason to extend it.
"It seems like just by the mere fact that the president's name is on it means Republicans are going to oppose it," said Steve Wamhoff of Citizens for Tax Justice.
He said his group supports extending the tax cut for workers, but also believes there are more effective measures the president and Congress could take.
The most effective, he said, would be direct spending. If the federal government would give more aid to the states, the jobs of thousands of state and municipal employees who are about to be laid off could be saved, he said.
Obama, however, seems to be convinced that spending measures will not pass Congress so he is concentrating on tax cuts, Wamhoff said.
The payroll tax would put money into the hands of people most likely to spend it, Wamhoff said, but Obama's expired "Making Work Pay" income tax cut from 2009 would get "more bang for the buck," he said.
Tax cuts for businesses are unlikely to help the economy, he said, because corporations are already profitable. They are not hiring because their consumers are not buying, not because they lack money. That is why it would be better to give tax cuts to consumers so they could spend more, he said.
Gilmore, the AIM president, said he likes the idea of rebuilding infrastructure to create jobs, backs the free trade agreements and believes coming up with a long-term deficit-reduction plan would help create some certainty in the economy.
Brown has his own ideas about creating jobs that have not been mentioned by the president.
One Brown proposal would lift a pending tax on medical device manufacturers that he calls "a wet blanket" on the industry.
Another bill supported by Brown would provide businesses with a tax credit for hiring a military veteran.
Jack Lank, president of the United Regional Chamber of Commerce based in Attleboro, said the one issue he hears his members talking about is the cost of providing health care.
He said he would like the president to address ways of making health care more affordable.
Although partisanship is standing in the way, Wamhoff said the high unemployment rate will help create public pressure for Congress to act.
Gilmore said he remains optimistic despite the politics.
"You have to be hopeful. It has to get dark before it is light," he said.