Rep. John Garamendi was on the phone with reporters just now to tout President Obama’s American Jobs Act, which he called “an extremely important, and very good and timely, proposal.”
Garamendi, D-Walnut Grove, said he’s increasingly excited about “the potential this has to employ people, get them back to work and get the economy moving again” and about the fact that that this “a major jobs program that is totally paid for.”
He said he was talking earlier today with Columbia University economist Joseph Stiglitz about the concept of growing the economy by putting people to work and simultaneously raising taxes where appropriate. The President’s plan, he said, has significant tax reductions in places likeliest to boost employment and the economy as well as tax increases where they have best chance to raise money from those who can afford it with least impact on consumer demand.
Specifically, the plan calls for $400 billion in new tax revenue by limiting itemized deductions and certain other exemptions for individuals with adjusted gross incomes of $200,000 or more, or $250,000 and up for married couples. Another $40 billion would come from closing tax loopholes for the enormously profitable oil and gas sector; $18 billion would come from ending hedge fund managers’ ability to count their earnings at the capital gains rate rather than as earned income; and $3 billion on reforming the corporate jet depreciation schedule.
And what would it pay for, particularly here in California? Details, after the jump…
According to the White House, the American Jobs Act will cut the payroll tax in half to 3.1 percent for employers on the first $5 million in wages, providing broad tax relief to all businesses but targeting it to the 98 percent of firms with wages below this level; in California, 710,000 firms would receive a payroll tax cut. The President’s plan also will expand the payroll tax cut passed last December by cutting workers payroll taxes in half next year; a typical California household, with a median income of around $56,000, would receive a tax cut of around $1,740.
The President’s plan also includes $50 billion in immediate investments for highways, transit, rail and aviation, helping to modernize an infrastructure that now receives a grade of “D” from the American Society of Civil Engineers and putting hundreds of thousands of construction workers back on the job, the White House says. This would include $3.96 billion in investments in California, which could support at least about 51,500 local jobs.
President Obama proposes to invest $35 billion to prevent layoffs of up to 280,000 teachers nationwide, while supporting the hiring of tens of thousands more and keeping cops and firefighters on the job; California would get about $3.62 billion to support up to 37,300 educator and first-responder jobs.
The White House says the plan includes a $25 billion investment in school infrastructure that will modernize at least 35,000 public schools nationwide; in California, it would mean an estimated $2.81 billion to support up to 36,600 jobs. Also, the plan includes investing $15 billion nationwide to employ construction workers in rehabilitating and refurbishing hundreds of thousands of vacant and foreclosed homes and businesses; California could get about $1.85 billion of that, plus funds available by competitive application. And the President proposes $5 billion of investments for facilities modernization needs at community colleges, including up to $1.13 billion for California.
The American Jobs Act also includes reforming the unemployment insurance system to help the jobless transition back to work, including more than a million long-term unemployed Californians, the White House says. The President also wants to extend unemployment insurance, keeping almost 357,000 Californians from losing their benefits in just the first six weeks. And the President proposes a new “Pathways Back to Work Fund” to give hundreds of thousands of low-income youth and adults – including an estimated 19,800 adults and 58,600 youths in California – chances to work and to get training in growth industries.
Republicans including those on the 12-member, bipartisan Joint Committee on Deficit Reduction don’t seem inclined to support such measures right now, Garamendi acknowledged today, but “the point of the next few months is to convince them that the American public wants to get back to work… That is a policy campaign the President will be conducting.”
Congressional Budget Office Director Douglas Elmendorf recommended Tuesday that the Joint Committee focus on maximizing economic growth by increasing government spending or cutting taxes “in the near-term.”