Hoping to turn around a faltering recovery and stave off almost certain political losses in November, President Obama announced at the White House yesterday that a “ package of ideas” to boost the economy and help increase job hiring is on the way. Armed with the “positive” news that private payrolls climbed by 67,000 in August, according to the Labor Department, the president will unveil the new policies in Wisconsin and Ohio this coming week.
Given a hostile political climate, though, and a Congress that couldn’t possibly stomach a strong second round of stimulus funding, Democrats’ options aren’t very plentiful. Here is a look at some of the measures that the team may unveil next week.
President Obama hopes to spur hiring at small business by implementing $12 billion in tax breaks and $30 billion worth of aid to free up credit. Already passed as a bill in the House, Senate Republications blocked the legislation as lawmakers left for summer recess, and it remains to be seen whether the bill will pass this month. Obama continues to pull for other cuts, too, all of which were passed by former President George W. Bush, albeit with one notable caveat: He wants to cease the breaks for households making more than $250,000 annually.
Infrastructure Spending and R&D Tax Credit
According to congressional aides who spoke with Bloomberg News on the condition of anonymity, Obama may pledge new infrastructure spending, one of the most efficient and direct ways for government to add workers to payrolls. He also plans to ask Congress to permanently extend a research-and-development tax credit, according to the aides. Both measures will, no doubt, be difficult to pass, especially as Obama’s administration balances new stimulus measures against their own projections of a record trillion-dollar-plus deficit this year.
The White House, so far, has not talked much about tax rebates, but they remain another major option—and one that many economists favor. Such rebates would be especially effective in getting the middle-class spending again. “It gets people back into the stores to buy things,” writes Politico’s Ben White, “spurring demand and hopefully spurring all those companies that make those things to hire more workers to make more things.” The drawback: People could spend the money on imported goods, fueling the economy globally perhaps, but not at home.