Washington just doesn't get it.
Capitol Hill needs to invite 100 industry captains into a closed-door session for a few days...THEN, maybe they'll wise up.
PROMISES, PROMISES: Jobs bill won't add many jobs
by The Associated Press
WASHINGTON February 11, 2010, 06:02 am ET
http://www.npr.org/templates/story/stor ... =123568224
There's a problem with the bipartisan jobs bill emerging in the Senate: It won't create many jobs.
The bill includes tax cuts to please Republicans and its passage would hand President Barack Obama a badly needed political victory. But even the Obama administration acknowledges the legislation's centerpiece — a tax cut for businesses that hire unemployed workers — would work only on the margins.
Tax experts and business leaders said companies are unlikely to hire workers just to receive a tax break. Before businesses start hiring, they need increased demand for their products, more work for their employees and more revenue to pay those workers.
"We're skeptical that it's going to be a big job creator," said Bill Rys, tax counsel for the National Federation of Independent Business. "There's certainly nothing wrong with giving a tax break to a business that's hired a new worker, especially in these tough times. But in terms of being an incentive to hire a lot of workers, we're skeptical."...
...The nonpartisan Congressional Budget Office recently concluded that reducing Social Security taxes for companies that add workers would be among the most efficient ways for the government to create jobs. However, in showing how difficult it is to create jobs through tax policy, CBO estimates that such a tax break would generate only eight to 18 full-time jobs per $1 million in tax breaks.
The Senate proposal, which is more narrow than the one analyzed by CBO, is estimated to cost about $10 billion. That would add 80,000 to 180,000 jobs over the course of a year. The U.S. economy, meanwhile, has lost 8.4 million jobs since the start of the recession.
Democratic leaders had originally hoped to pass the bill this week, before record snowfalls effectively shut down Congress and much of the rest of the federal government in the nation's capital. Final action now may not come until March.
In addition to a tax break for hiring workers, the Senate package would extend unemployment payments for people without jobs for more than six months as well as subsidies to help the jobless continue paying premiums for health insurance they had been getting through their former employers...
...At a hearing last week, House Democrats peppered Treasury Secretary Timothy Geithner with questions about whether a tax break for hiring workers will increase employment. Geithner defended the idea but acknowledged that businesses won't start hiring until demand for their products and services increases.
"I think this will provide a little bit more of a boost, a little more spark to make sure as we grow, we're creating more jobs than we otherwise would," he told the House Ways and Means Committee.
Rys, of the National Federation of Independent Business, said the credit could speed hiring once employers need more workers. But, he said, NFIB members aren't seeing many signs of improvement.
"Right now, business owners just don't have customers," Rys said. "Until you have work for the employee to do, there's really less of a reason to hire a new worker."
