The House of Representatives came back early from their district work sessions today to pass another important measure for the economy: support to help states stay above water during difficult times and, in particular, to prevent hundreds of thousands of teacher layoffs. All told, as many as 900,000 public and private sector jobs could have been lost if this bill weren't passed – the last thing our economy needs. Keeping these Americans at work, whether they are teachers in the classroom or police keeping our streets safe, will also help ensure that the economic recovery keeps moving forward. With the House and Senate both having passed this legislation now, the President has now signed it into law.
The Recovery Act gets a lot of attention as a centerpiece of the President’s economic agenda -- justifiably so given that it’s been responsible for about 3 million jobs -- but the legislation the House passed today is only the latest example of the President’s ongoing efforts to boost our economy. Despite the fact that most of these efforts were on issues that have had broad and bipartisan support, the use of parliamentary maneuvers from the Republican Leadership in the Senate has made it a difficult fight for every inch. Many of the President’s initiatives have still ultimately passed over this obstruction as the legislation today did, and he will continue fighting to ensure everything possible is being done to strengthen our recovery and get Americans back to work.
Working with Congress, we have made crucial progress on jobs legislation over the past months. For example:
Tax cuts to encourage hiring: In March, the President signed the bipartisan HIRE Act, which provides payroll tax credit – designed by Senators Hatch and Schumer – for companies that hire employees who have been looking for work for 60 days or more. The Treasury Department reports that businesses have hired over 5.6 million workers through this program in just five months. The HIRE Act also allows firms to write off more of their investments in new equipment, encouraging capital spending. In addition, the President has worked to limit costs for small businesses. The recent health reform package made 4 million small business owners eligible for a health care tax credit that covers up to 35 percent of premiums.
- Just last week, BusinessWeek reported on how the HIRE Act can impact individual employers: “Two months ago, we wrote about Blinds.com, a Houston blinds e-tailer that was struggling to determine whether to hire additional workers. The boss, Jay Steinfeld, told us his business was profitable and had “plenty of cash,” so he could afford to take on new staff. But he was worried about the state of the housing market, crucial for any home furnishings retailer. Government initiatives weren’t top of mind. Still, as we talked, he did acknowledge that his team was taking into consideration some of the Obama Administration’s incentives to hire. His CFO, Marilynne Franks, said that the Hiring Incentives to Restore Employment Act’s tax credit for hiring unemployed workers, which took effect in March, would soon be paying off for the company. She figured Blinds.com would be eligible for tax credits for 8 or 10 of the 35 employees it had brought in since the beginning of the year.”
Promoting exports: The President also set a goal to double exports in the next five years. In March the President signed an Executive Order establishing an export promotion cabinet chaired by the CEOs of Boeing and Xerox to guide the government toward this goal. Federal agencies are also coming together to set up one-stop-shops across the country, and in our 250 embassies and consulates abroad, to help American businesses gain a foothold in the fastest-growing foreign markets with the most demand. In addition, the President has proposed increasing funding to the International Trade Administration and to USDA programs that connect farmers with new markets. Finally, the President signed the Travel Promotion Act into law to encourage foreign tourists to visit American destinations and support local businesses.
- A Brookings Institution report out a couple weeks ago explained the immense opportunity here, profiling 100 metropolitan areas: “The growth rate of exports shows how dynamic and vibrant the export economy has been over recent years—specifically 2003 to 2008. Although the recession saw a large drop in exports from 2008 to 2009, the most recent U.S. data show that export growth is once again much faster than GDP growth, meaning that foreign demand for U.S. products is growing faster than domestic demand. The fastest growing metropolitan areas have been especially successful at taking advantage of this demand.”
Supporting our Workforce: Last month, Congress passed and the President signed HR 4213, which extended the eligibility period for extended unemployment insurance benefits from June 2nd to November 30th. This extension will provide some 3.2 million Americans with much needed help making ends meet while they search for employment. The CBO has said that aid to the unemployed is one of the two most cost-effective policy options for increasing economic production and employment.
- The Detroit News gave just a snapshot of how this would benefit Americans looking for work: “Tens of thousands of unemployed Michiganians whose jobless benefits were cut off during a seven-week stalemate in Congress will have access to their money as early as Tuesday. ‘It's just fabulous news,’ said Melissa Burke of Farmington Hills, who nearly emptied out her bank account during an impasse in the Senate that resulted in the federal benefits program expiring June 2. ‘I'll be able to pay some bills,’ said Burke, a laid-off graphic designer. ‘I've cut spending down to the bare minimum -- no cell phone, no satellite TV, and 33 cents a day to feed the dog.’”
But there remains much work to do to overcome efforts by Republicans in the Senate to block additional job-creating measures. Two areas in particular that the Senate should move immediately are:
Creating construction jobs while promoting energy efficiency: The President has also advocated a “Homestar” program of rebates for consumers that undertake energy efficiency investments in their home. This bipartisan legislation would help create jobs in the hard hit construction and manufacturing industries while saving consumers money and helping reduce our economy’s dependence on oil.
Further support for small business: In total, the President has enacted seven tax cuts for small businesses since taking office. And the President has advocated additional measures: eliminating capital gains taxes for key investments in small firms, extending “bonus depreciation” provisions in the Recovery Act, and increases deductions that small businesses can take for new equipment and other expenses. His plan would also make more credit available: it establishes a $30 billion lending fund, provides over $2 billion in grants to state-run innovative small business programs, extends the 90% SBA loan guarantee on 7(a) loans, and eliminates all fees for both 7(a) and 504 loan programs.
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