President Obama will make a statement at 10 a.m. at the White House on today’s new employment report, which showed August unemployment at 9.6 percent.
In the meantime, speculation soars about a September “stimulus” plan. The Washington Post reports, “White House considers pre-midterm package of business tax breaks to spur hiring“:
With just two months until the November elections, the White House is seriously weighing a package of business tax breaks – potentially worth hundreds of billions of dollars – to spur hiring and combat Republican charges that Democratic tax policies hurt small businesses, according to people with knowledge of the deliberations.
Among the options under consideration are a temporary payroll-tax holiday and a permanent extension of the now-expired research-and-development tax credit, which rewards companies that conduct research into new technologies within the United States.
Running it up the flagpole, eh? Well, salud!
But it all seems so tactical, more a matter of packaging than policy. Take the research and development tax credit, for example. President Obama’s proposed budget for Fiscal Year 2011, released February 1, already called for making the R&D tax credit permanent. If you have to give it a new label, call it “Super Stimulus Innovation Jobs Great Tax Credit for Business, Business, Business,” to get it passed, fine, but the credit — first adopted in 1981 — has proved to be an effective tool for job creation and innovation that should have passed long ago on its merits. (It’s like the Miscellaneous Tariff Bill: OK if you want to redub it the Manufacturing Enhancement Act, just get it done!)
Dena Battle, tax policy director at the National Association of Manufacturers, appeared on Fox Business News on Thursday to discuss these issues (video). Asked about the new proposals being floated, she said:
Some of the things they are talking about are good ideas. Obviously we support a permanent R&D tax credit. I think what’s really missing here are some other key elements. You’ve got these 2001 and 2003 tax cuts expiring at the end of this year, and Congress has done nothing to extend those. Businesses are looking at that, and they have no idea what tax rates they’re going to be paying next year.
You really have to do something to show businesses and give them that level of certainty right now. That has to be part of anything they’re doing for job creation.
Right. If you read toward the end of the Post story, you see a reference to the White House considering “targeted business tax breaks.” Targeted = tactical.
But as NAM President John Engler argued in his introduction to the NAM’s report, the “Manufacturing Strategy for Jobs and a Competitive America“: [We] have no battle plan, no comprehensive approach for making manufacturing in the United States more competitive, more productive and creating even more high-paying jobs. The unprecedented challenge to U.S. manufacturing pre-eminence requires clear thinking, a global vision and a plan.” That is, a strategy.
UPDATE (10:25 a.m.): President’s White House appearance amounted to a reaffirmation of his proposal for small business loans and extending “middle class tax cuts,” which is to say, letting the bulk of the 2001 and 2003 tax cuts expire. He’ll say more next week.
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