The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (
) -- President Obama
presented his promised jobs bill to
Congress and the American people last night. Obama's approval ratings and those of congressional Republicans are polling especially low, largely due to the economy and unemployment rates that continue to hover around 9%. Ideally, Obama's speech could be just the thing to rally Congress and demonstrate to voters that the three-ring circus surrounding the vote to raise the nation's debt ceiling really isn't par for the course in Washington.
The President's proposal has a lot going for it. It's bold, it's creative, it addresses many of the nation's biggest practical concerns, and it could put a lot of unemployed Americans back to work. Unfortunately, however, the devil remains in the details, and odds are that Congress will reject the President's plan. Here are four reasons Congress should pass President Obama's American Jobs Act ... and the reason they won't:
It crosses industries. Those of us who expected the President to favor some industries over others were wrong (I, for one, expected him to push for
, but he barely gave them a nod). Under the President's proposal, any company in any industry that hires veterans or the long-term unemployed will get tax breaks. That encourages all industries to increase their hiring across the board, and reduces the likelihood that one or two industries will be unfairly advantaged.
It efficiently uses revenue. The President's plan does emphasize benefits to two critically important groups: teachers who are responsible for helping our children grow into responsible, wage-earning adults, and construction companies who would receive loans to rebuild the nation's infrastructure. As President Obama observed, America has let its highways crumble and its schools go without needed equipment and technology for far too long if we want to remain competitive with other, growing economies. Our children need to be prepared to compete in a global economy and our infrastructure needs to be repaired anyway, so why not build jobs while we're rebuilding schools, roads, bridges, and airports?
It targets job growth. To quote President Obama, "small businesses are where most new jobs begin." Recognizing that large corporations have recovered better from the recession than their smaller counterparts, the President's proposal would grant payroll tax cuts to small businesses that hire new workers or raise workers' wages. It would also allow those same small businesses to continue to write off the investments they make in 2012. With those added revenues, small businesses might well be more likely to succeed, offering continued employment opportunity to their workers.
It crosses party lines -- in theory. According to President Obama, the majority of his proposals involve concepts that Democrats and Republicans alike have supported in the past. That may make it harder for the President's opponents to criticize those proposals, lest they be accused of flip-flopping for political gain.
But... it's not clear how we'd fund it. And therein lies the rub. Congress is already tasked with finding an additional $1.5 trillion in spending cuts by year-end. President Obama will ask Congress to find an additional $450 billion to fund the Act at a time when Congressional leaders are already at each others' throats over how federal tax dollars will be spent. The President has promised a more ambitious deficit reduction plan that would, presumably, cover the cost of the American Jobs Act. Until it arrives, though, his jobs proposal will likely see little action in Congress.
As the President correctly observed, the next election is 14 months away. Politicians from both sides of the aisle are always running for office, and are undoubtedly fretting even now about how their responses to the President's plan will help or hinder their chances of getting re-elected. But if the economy continues to slow and unemployment stays high, they're not likely to get re-elected anyway. Congress doesn't necessarily have to pass President Obama's proposal, but it certainly had better pass something.
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