Editor’s Note: You’ve seen the commercials and heard President Barack Obama tell Congress “(Some Americans) are living week-to-week, paycheck-to-paycheck, even day-to-day. They need help and they need it now,” but who has time to actually read Obama’s proposed American Jobs Act? Here’s a breakdown of the Act and what it could mean for you.*
There are four major categories:
1) Tax Cuts for Small Business
If passed, the plan would cut in half the taxes paid by 98 percent of businesses on their first $5 million in payroll, and institute a payroll tax holiday for hiring new workers or increasing the wages of workers. What does this mean? Small businesses will have to pay fewer taxes and can hire more workers.
2) Putting Workers Back On the Job
The plan proposes a “Returning Heroes” a $5600-9600 hiring tax credit for veterans, which will encourage employers to hire vets.
If passed, it would prevent up to 280,000 teacher layoffs, and work to keep cops and firefighters on the job.
The plan dedicates $30 billion to modernizing at least 35,000 public schools across the country and a $5 billion investment in modernizing community colleges (including tribal colleges), as well as allotting $50 billion for modernizing roads, railways, airports and waterways, opening up thousands of new jobs.
3) Pathways Back to Work for Americans Looking for Jobs
Obama says the Jobs Act includes the most innovation reform to the unemployment insurance program in 40 years. It extends unemployment insurance to prevent 6 million Americans looking for work from losing their benefits.
It encourages employers to prevent layoffs by promoting work-sharing, as opposed to layoffs.
The plan aims to establish a new “Bridge to Work” program to build on and improve state programs where those without work can take temporary, voluntary work or pursue on-the-job training, making them more employable.
The Jobs Act proposes $4,000 tax credit to employers for hiring long-term unemployed workers and prohibits employers from discriminating against unemployed workers when hiring.
4) Tax Relief for Every American Worker and Family
If passed, the plan would cut payroll taxes in half for 160 million workers in 2012, which would provide a $1,500 tax cut to the average American family earning $50,000 per year.
The plan would also allow more Americans to refinance their mortgages at today’s near 4 percent interest rates, which can put more than $2,000 a year in a family’s pocket.
To ensure the Jobs Act is fully paid for, the President will call on the Joint Committee to come up with additional deficit reduction necessary to pay for the Act and still meet its deficit target.
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The Jobs Act was defeated in the Senate on Oct. 11 by a 50-49 vote. Officials said the vote may end the bill’s legislative life as a unified package, but pieces of it could pass in coming months.
What do New Mexico Democrats and Republicans say of the Act? As always, they disagree.
U.S. Senator Tom Udall (D-NM), said he thinks the plan provides important job creation measures for middle-class New Mexicans and for college students, and that he wants to see Congress pass the plan.
“It is important that we take action now to strengthen our economy, so that current and graduating college students can succeed in finding jobs and building successful careers,” he said.
“Students who have worked so hard in the classroom deserve the opportunity to get ahead.”
U.S. Congressman Steve Pearce (R-NM) said the plan only provides more spending and stimulus, which he said won’t help unemployment in the long run.
“It is time for the administration to accept that we cannot spend our way to economic recovery,” he said. “This administration has promised 13 million jobs through the stimulus plan, green energy policies, extending unemployment benefits and health care.”
*According to the American Jobs Act, whitehouse.gov, and firedoglake.com
