Wednesday, February 24, 2010

$35B Jobs Bill to Only Add 250K Jobs

After losing 8.4M jobs during this recession, a jobs bill that is estimated to only add 250,000 jobs seems rather worthless to pursue. After all, we're talking about a lot of rules and regulations that must be adhered to in order to qualify not to mention the accounting work that it takes to work out that numbers and track which employees do and don't qualify for these tax breaks.

Mark Zandi is a very credible economists so we'll go with his numbers. They pretty much sum up the bill. Too little and too much work to track.
  • The new hiring tax credit could spur about 250,000 new jobs, according to economist Mark Zandi of Moody's Economy.com. The economy has shed 8.4 million jobs since the recession began in December, 2007.

The new bill will exempt small businesses from paying the 6.2% Social Security tax until December and a potential $1,000 credit if they remain employed for a year. Plus it provides funds for federal transport projects to the tune of $20B. The 2nd part sounds like just shifting money around and not really additional funds for infrastructure.

  • The bill contain two major provisions. First, it would exempt businesses hiring the unemployed from the 6.2 percent Social Security payroll tax through December and give them an additional $1,000 credit if new workers stay on the job a full year. The Social Security trust funds would be reimbursed for the lost revenue.
  • Second, it would extend highway and mass transit programs through the end of the year and pump $20 billion into them in time for the spring construction season. The money would make up for lower-than-expected gasoline tax revenues.

No comments: