This week President Obama sent Congress his jobs plan, the American Jobs Act, which he outlined in a speech last week before a joint session of Congress. The American Jobs Act is a $447 billion jobs creation proposal consisting of a combination of tax cuts ($253b), extension of unemployment benefits ($35b) and investments in transportation infrastructure and school-renovation projects ($105b). President Obama said on Monday that the plan will be paid for with tax increases for individuals making more than $200,000 and couples earning more than $250,000 and with elimination of tax provisions that reduce the costs of energy exploration and extraction). The President also asked that the Joint Select Committee on Deficit Reduction (aka Super Committee) to come up with additional deficit cuts necessary to offset the increased funding. President Obama said that building a world-class transportation system is part of what made the United States an economic superpower and therefore called for needed investments in infrastructure including:
- $50 billion for highway, transit, high-speed rail and aviation projects
- $30 billion for investment in school infrastructure and modernizing community colleges
- $10 billion for establishing a National Infrastructure Bank capitalized with $10 billion. The bank would finance transportation, water, and energy infrastructure projects.
- $15 billion to rehabilitate and refurbish hundreds of thousands of vacant and foreclosed homes and businesses in an effort to put construction workers back to work
- $10 billion to expand high-speed wireless access to at least 98 percent of Americans
- $65 billion to temporarily eliminate employer payroll taxes on wages for new workers or raises for existing workers, and cut the payroll tax to 3.1 percent for employers on the first $5 million wages
- $175 billion to expand the payroll tax cut passed last Dec. by cutting workers payroll taxes in half in 2012.
- $5 billion to extend 100 percent expensing, allowing all firms to take an immediate deduction on investments in new plants and equipment.
AGC supports the recognition that investing in our nation’s infrastructure is a true job creator; however, we are concerned that some of the elements of the President’s plan would not have an immediate impact on the employment situation in the construction industry. We also believe that the money in the proposal for transportation investment would be better spent as a supplement to the available funding in the highway trust fund so a muliti-year surface transportation bill could be finalized. For example, the creation of a National Infrastructure Bank could take years to set-up and capitalize before any infrastructure projects begin. A complete breakdown of the President’s plan can be found
here.
As President Obama has embarked on his nationwide tour pushing for passage of the American Jobs Act, the plan has received mixed responses from both Democrats and Republicans. Republican opposition has focused on the President’s inability to, as of yet, identify reasonable ways to pay for such an ambitious plans other than “taxing the job creators”. Democratic opposition has come from a small group of both conservatives and liberals. Conservative Democrats, like Republicans, are concerned over increasing taxes to pay for the plan. Liberal Democrats worry over what the long-term effects of extending the payroll-tax cut will have on Social Security.
The path forward for the American Jobs Act in Congress remains to be seen. It is likely that the Democratic controlled Senate could introduce the President’s plan (or something closely resembling it), and force a vote while the Republican controlled House may take pieces of the plan that have bipartisan support and move those forward. Some of the bipartisan supported pieces include: the payroll tax-cut, passing free trade agreements, certain infrastructure initiatives, and a 1-year delay in the 3 percent withholding on certain government contracts that AGC continues to fight to repeal.
AGC will continue to stress for the enactment of policies included in the American Jobs Act that has the greatest direct impact on the construction industry.
For more information, please contact Sean O’Neill at (202) 547-8892 or oneills@agc.org.