Obama yesterday met with union leaders, educators, academics, and business people in order to try and figure out what the Federal Government can do to create jobs. "Job creation ultimately comes from the private sector," Obama proclaimed yesterday. I found it almost astonishing to hear him say that. Especially when considering the fact that everything that he has done so far belies this assumption. But if I'm to give him the benefit of the doubt, the White House might be starting to realize that blindly pushing forward with a job killing healthcare bill and a job killing cap and tax bill--and all the uncertainty that is caused by their irresolution-- is probably not helping the creation of jobs. Then again there's always the possibility that Obama doesn't actually believe that jobs come from the private sector, he just knows that he's supposed to say that. In any event, what he actually believes will likely be reflected by the solutions he will be proposing.
After all, prominent lefties like Arianna Huffington and Robert Reich are now finally advocating some common sense solutions such as a new employee tax credit whereby the Federal Government essentially pays businesses to hire people in the form of tax breaks. Reich and Huffington are also now finally calling for a payroll tax holiday, something I initially advocated back in February. They could use the unspent TARP money or the unspent "stimulus" money to fund these programs.
Obama should just forget the jobs summit and implement the following plan:
• Repair the stimulus. Freeze the funds that haven't yet been spent and redirect them to immediate, private sector job-creation priorities.
• Create tax incentives that promote business expansion and hiring. For example, install a robust investment tax credit, permit businesses to expense capital purchases made in 2010, and reduce payroll taxes. These will reignite construction, technology and a wide array of capital goods industries, and lead to expanded employment.
• Prove to the global investors that finance America's debt that we are serious about reining in spending and becoming fiscally prudent by adopting limits on non-military discretionary spending and reforming our unsustainable, unfunded entitlements. These are key to strengthening the dollar, reducing the threat of rampant inflation and holding down interest rates.
• Close down any talk of carbon cap-and-trade. It will burden consumers and employers with billions in new costs. Instead, greatly expand our commitment to natural gas and nuclear, boosting jobs now and reducing the export of energy jobs and dollars later.
• Tell the unions that job-stifling "card check" legislation is off the table. Laying new burdens on small business will kill entrepreneurship and job creation.
• Don't allow a massive tax increase to go into effect in 2011 with the expiration of the 2001 and 2003 tax cuts. The specter of more tax-fueled government spending and the reduction of capital available for small business will hinder investment and business expansion.
• New spending should be strictly limited to items that are critically needed and that we would have acquired in the future, such as new military equipment to support our troops abroad and essential infrastructure at home.
• Install dynamic regulations for the financial sector — rules that are up to date, efficient and not excessively burdensome. But do not so tie up the financial sector with red tape that we lose a vital component of our economic system.
• Open the doors to trade. Give important friends like Colombia favored trade status rather than bow to protectionist demands. Now is the time for aggressive pursuit of opportunities for new markets for American goods, not insular retrenchment.
• Stop frightening the private sector by continuing to hold GM stock, by imposing tighter and tighter controls on compensation, and by pursuing a public insurance plan to compete with private insurers. Government encroachment on free enterprise is depressing investment and job creation.
The above plan is that of Mitt Romney, from his recent USA Today op-ed. Here is Arianna Huffington's plan:
• Use Wall Street bailout funds left in the TARP program to hail out Main Street (via increased lending to small businesses and using money for public services being cut by states and cities).
• Enact a one-year payroll tax holiday (creating a moratorium on Social Security, Medicare, and FICA taxes will encourage businesses to hire new workers).
• Expand the Small Business Association's lending programs (45 percent of all job losses have been at small businesses).
• Offer businesses a tax credit for every new job created over the next 12 months, or have the government pay a portion of the salary of new workers hired over the same period.
And finally, Robert Reich's:
• A new jobs tax credit for any firm creating net new jobs.
• Lending directed at small businesses, which are having a hard time getting credit but are responsible for most new jobs.
• A one-year payroll tax holiday on the first, say, $20,000 of income – which would quickly put money into peoples’ pockets and simultaneously make it cheaper for businesses to hire because they pay half the payroll tax.
If Barack Obama is seriously looking for a way the Federal Government can create jobs then he should first get government out of the way by shelving healthcare reform and cap and trade. Second, he should implement the above ideas. This is not only a bi-partisan solution, this is the real way to create jobs.