President Obama's American Jobs Act

President Barack Obama laid out his proposal to combat rising unemployment and a slowing economy in an address to both houses of Congress in Washington on Sept. 8. The American Jobs Act proposal calls for a mix of tax cuts and spending designed to jumpstart a stagnant job market, while providing opportunities for long-term infrastructure and education investment.

The American Jobs Act, if voted for by Congress, will focus on three key areas: tax cuts for businesses and workers, investment and aid to states and continued assistance for the unemployed. The Act, at an estimated cost of $447 billion, will be paid for by closing certain tax loopholes and, in time, raising tax rates on the wealthiest Americans.

The plan offers several solutions: payroll tax cuts of up to $1500 a year for workers as well as for employers, coupled with a tax holiday which temporarily reduces or eliminates a tax on wage increases and new hires. It also allows 100 percent deductions for businesses on new equipment and facilities for one year. Tax credits would go to businesses that hire people who have been unemployed six months or longer, with a larger credit for hiring a veteran.

The nation's schools, roads and bridges would also receive attention, channeling billions of dollars to modernize public schools, prevent lay-offs in education, as well as repair high- ways, airports and urban transportation systems. To help the unemployed, the act would extend unemployment benefits while providing funds for worker training programs and extra money to provide students and young people with summer and year-round job options. These recommendations are reasonable and necessary to increase employment, encourage investments in business operations and prepare this country for the challenges it will face.

Republicans are against it. They argue that extra spending will increase the deficit. Leaving aside President Obama's pledge to "completely pay for" the act, it is important to realize why spending during an economic downturn can be beneficial in the long-term. Since interest rates are set low during times of economic struggle, improvements to roads, bridges and schools, (which create more employment opportunities) can be made at much lower costs than in times of prosperity. Although these projects may be difficult to pay for in the short-term, in the long-term more money can be saved.

Look at it this way: we as students borrow at a low interest rate and spend the money on tuition, computers, supplies and living expenses. We spend now because the investment is worth it in the long run. The spending provisions in the American Jobs Act work on the same principle.

The resistance from Republicans is not one based on facts but on ideology and self-interest. They refuse to acknowledge any solution outside of deregulation and tax cuts.

Regulation and taxes do, of course, cut into company profits but it does not follow that freeing corporations from these restrictions will translate to better jobs and living conditions for workers. If, for instance, you live in Texas, you are statistically about 0.5 percentage point more likely to have a job than those in the rest of the country. Gov. Rick Perry attributes those jobs to lower taxes and less environmental regulation.

There is a price to be paid for those extra jobs: Texas ranks first in the nation for total toxic pollutants released into the air and 46th for water quality. As a Texan, you are more likely to live in poverty, as Texas and the southern states nearest it lead the nation in poverty rates, 18.4 percent in 2010, compared to a national average of 15.1 percent. You may also have to do without health insurance, as Texas has the most uninsured workers, at 27.4 percent. If you have children, you should know that Gov. Perry has slashed 4 billion dollars from school funding, or about six percent of school district budgets.

The kind of low taxation and deregulation Gov. Perry and members of Congress demand is akin to what President Obama in his speech called a "race to the bottom for the cheapest labor and the worst environmental protections. "

So, the American Jobs Act should be passed as is, without the compromises that defined the health care and debt ceiling debates. We can be sure a version of this bill will pass Congress and be signed into law but in our haste to help people find work we must not allow "a version" to become "any version. " Supporters of a bi-partisan recovery must echo President Obama's call to Congress: "You should pass this bill right away. " I only hope it is "this bill" that gets passed.