Obama's jobs speech: President expected to propose $300 billion in tax cuts, aid
WASHINGTON — For five months, Bob Bloom has watched his business spike and dip, just like the stock market. After a great April, he suffered his worst July in six years. There was so little work "we sat around looking at each other," he said. Then, sales skyrocketed in August.
Earlier this week, Bloom worked until 9 p.m. to keep up with orders at his business, Ink & Toner USA in suburban West Palm Beach. He's again thinking of adding another employee to his four-person team.
Bloom is just the kind of business owner President Obama hopes to appeal to tonight when he lays out his plan to boost jobs in America. Yet the small business owner says there's virtually nothing the president could offer him - other than paying for the employee - that would guarantee Bloom will start interviewing.
"It's not predictable out there. The business has to justify hiring," he said. "I don't look to Washington to give me incentive to hire."
When Obama takes to the airwaves to address a joint session of Congress, he will be speaking to a skeptical public who, like Bloom, need concrete plans and not words to gain faith that the economy will improve.
The president is expected to propose spending roughly $300 billion on a package of tax cuts, infrastructure spending and aid to state and local governments, according to details of the plan that have leaked. The majority of the spending would go to extending unemployment benefits and a payroll tax reduction that saves the average working family close to $1,000.
Another widely reported facet of Obama's plan is a public/private infrastructure program that would include not only traditional roads, schools and power plant projects, but also soft infrastructure such as high-speed Internet for local governments and communities without it. The president is also expected to include money for local governments, as he did in his first stimulus plan, that would prevent teacher layoffs, for example.
Obama's jobs package could spur the creation of 75,000 to 150,000 jobs, said David Denslow, research economist for the Bureau of Economic and Business Research and professor in the University of Florida Department of Economics.
"We need that, but we certainly need far more than that," Denslow said.
Rather than extending the 2 percentage point payroll tax reduction, Obama instead should offer a tax credit solely for low-income workers, such as a household earning less than $30,000 or $40,000 a year, Denslow said. Those taxpayers are more likely to spend any money they save than higher wage earners who may instead pocket the payroll tax savings.
"You could probably get twice the jobs for the money," Denslow predicted.
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