In Barack Obama’s speech to the joint session of Congress, the President emphasized that his new jobs plan had four specific qualities that made it easy to pass this bill immediately, as Obama chanted repeatedly during his speech. His plan would be fully funded, it would not add to the deficit, it would create jobs immediately, and it was chock-full of bipartisan ideas. The Associated Press fact-checked these claims, and found them all false.
Paid for? No:
Obama did not spell out exactly how he would pay for the measures contained in his nearly $450 billion American Jobs Act but said he would send his proposed specifics in a week to the new congressional supercommittee charged with finding budget savings. White House aides suggested that new deficit spending in the near term to try to promote job creation would be paid for in the future – the “out years,” in legislative jargon – but they did not specify what would be cut or what revenues they would use.
Essentially, the jobs plan is an IOU from a president and lawmakers who may not even be in office down the road when the bills come due.
Obama’s proposed cut in the Social Security payroll tax does seem likely to garner significant GOP support. But Obama proposes paying for the plan in part with tax increases that have already generated stiff Republican opposition.
For instance, Obama makes a pitch anew to end Bush-era tax cuts for the wealthiest Americans, which he has defined as couples earning over $250,000 a year or individuals over $200,000 a year. Republicans have adamantly blocked what they view as new taxes. As recently as last month, House Republicans refused to go along with any deal to raise the government’s borrowing authority that included new revenues, or taxes.
It’s hard to see how the program would not raise the deficit over the next year or two because most of the envisioned spending cuts and tax increases are designed to come later rather than now, when they could jeopardize the fragile recovery.
And immediately effective? Not even close:
One is to set up a national infrastructure bank to raise private capital for roads, rail, bridges, airports and waterways. Even supporters of such a bank doubt it could have much impact on jobs in the next two years because it takes time to set up.
The AP doesn’t address Obama’s insistence that this package will work at all, and rightly so, since that is more of a political analysis than a fact check. However, the same elements Obama insisted last night would stimulate job growth were the same elements that comprised the 2009 stimulus bill. We have the same speeded-up infrastructure spending (this time masquerading as an “infrastructure bank”), the same money for state bailouts dressed up as rescue packages for teachers and first responders, the same Making Work Pay-type temporary tax cut for workers, and a “hiring tax credit” that flopped when Jimmy Carter first tried it.
Obama didn’t offer one single new idea last night. He didn’t even offer an idea on how to pay for the bill, whose price tag Obama never mentioned once in his speech but has now bloated from an initial estimate of $300 billion to $450 billion. Instead, he told Congress to figure out how to carve the cost out of future spending while it battles over meeting its $1.5 trillion commitment from last month’s debt-ceiling increase.
Over and over again last night, Obama lectured Congress to “pass this bill.” It seems more like Obama passed the buck — and now wants to wash his hands of the failures of Obamanomics.
Update: Let’s get a translation of the AP from My Cousin Vinny (mildly NSFW):