What Obama’s Budget Means for Jobs
NEW YORK (MainStreet) — Much of the coverage of President Obama’s budget for the 2013 fiscal year focused on the administration’s projection that the national deficit will stay higher than $1 trillion through the end of his first term, a sobering estimate to be sure.
Looking past the deficit numbers though, the president’s budget answers what is arguably a more pressing question for many Americans: What does the Obama administration intend to do to spur job growth in the coming year? The short answer is they are still hoping to push through many of the same proposals that the president has promoted in speeches during the past six months.
The budget sets aside $350 billion for short-term measures to boost job growth, including $50 billion in infrastructure spending on roads and bridges, $30 billion to help states hire more teachers and first responders as well as tax credits for small businesses that add jobs and manufacturers who bring jobs back from overseas. The budget also leaves room for an extension of the payroll tax cut – something Congress is currently fighting over – which would likely cost about $100 billion.
If these policies sound familiar, it’s because most were part of the American Jobs Act, a $450 billion package of legislation that President Obama first proposed in September to accelerate the economic recovery. Congress has so far failed to come together to pass the provisions in this package and it’s unlikely much progress will be made in this election year.
After the president announced the American Jobs Act last year, one economist told MainStreet that it could help save or create 4.3 million jobs in 2012 and push unemployment below 8%, 1.6 million of which came from an extension of unemployment benefits and payroll tax cuts. However, these estimates were based on the assumption that all provisions in the legislation would be approved and that more than $400 billion would be pumped into the economy throughout 2012, giving it a big jolt. Even if Congress miraculously approved the wish list of job creation policies in the latest budget, the $350 billion in proposals is a smaller investment than the original jobs legislation, meaning its impact on the economy will be smaller as well.
The truth though is that Congress has already shown resistance to approving infrastructure spending, federal aid to states and unemployment benefits, which may explain why the administration is taking a firm stand on the payroll tax cut extension. Based on this list of ideas, it may just be the only significant job creation proposal the Obama administration has left with any chance of passing before the election.
Seth Fiegerman is a staff reporter for MainStreet. You can reach him by e-mail at seth.fiegerman@thestreet.com, or follow him on Twitter @sfiegerman.
