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The Truth About the "Jobs" Bill

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RUSH: Okay, the "jobs bill." The Democrats have unveiled their "jobs bill." "Jobs bill." Reuters reports this breathlessly. (panting) "Senate Democrats released a long-awaited jobs bill on Thursday [panting] that relies on business tax breaks [panting] and construction projects to bring down the unemployment rate [panting]. The bill also extends a number of other programs from unemployment insurance to Medicaid payment rates that have either expired or will expire soon." Just as we foretold, ladies and gentlemen, much of the money (that we don't have) will go to unemployment insurance. Now, leaving aside the merits of extending unemployment benefits or Medicare payments, what do either of these have to do with creating jobs? Not a damn thing. But it sounds better to call it a "jobs bill" rather than "an unemployment compensation extension bill."

And from a breathless Politico writer we get more details on what's in the unveiled Senate "jobs bill" and how it's designed to give the Democrats cover. The headline's all you need to hear but you'll hear more from me. "Baucus, Grassley Cut Deal on Jobs -- The Senate Finance Committee on Thursday morning announced a breakthrough on an $85 billion jobs bill that includes a series of small-business tax breaks and other tax provisions designed to draw Republican support," the emphasis there on SMALL. "The joint announcement -- by Chairman Max Baucus of Montana and the panel's top Republican, Chuck Grassley of Iowa -- is aimed at giving the proposals some bipartisan heft in a Senate chamber mired in partisan gridlock on just about every other major issue. In fact, the release announcing the bill used the word 'bipartisan' seven times in just a few paragraphs." (sigh) What a mistake.

The Democrats need to own all of this. They don't need to be able to say Republicans participated in this. "Baucus and Grassley said their package was a 'first step,'" I'm sure, "and urged Senate leadership to allow at least three days for lawmakers to review the bill. The Finance Committee did not attach a price tag to its bill," but Reuters breathlessly calling it an $85 billion bill. "'It is especially important that all members and the public have sufficient time -- at least 72 hours -- to review and comment on this package before the Senate begins voting on the bill ...' the two senators wrote in a statement." Now, we assume it goes without saying here that it will not be posted on the Internet. Why should a tax-paying public be allowed to see how their money is being spent? Dingy "Harry Reid wanted to pass a jobs bill before Congress left for recess Friday. But two punishing blizzards made it difficult to schedule votes this week. The Finance Committee agreement, however, may be the breakthrough [Dingy Harry] needs if he wants a vote after next week's Presidents Day recess."

Now, everything I've said and heard call this bill incredibly urgent. It's incredibly urgent! Why, we gotta do this now. But apparently, folks, it's not urgent enough for the Senate to give up its Presidents Day week-long recess -- after having been off all this week. So it's not urgent enough to get it signed in two weeks, but it's urgent enough to have to get it done. Now, "The bill includes an infusion of funds into the Highway Trust Fund," this jobs bill, "the so-called doc fix for Medicare reimbursements" in a jobs bill "and an extension of unemployment insurance and other benefits for" out of work people, in a jobs bill. I haven't read one thing yet about the creation of jobs. Oh. "It also includes several provisions outside the panel's jurisdiction, like a reauthorization of the USA Patriot Act, the national flood insurance program and $1.5 billion in agriculture disaster assistance" in a jobs bill! It's called a jobs bill.

"Grassley and Baucus also fired a warning shot aimed at partisans on both sides... 'Any efforts to needlessly delay Senate completion of consideration of this package through partisan means will undermine our goal of timely action in the current economic climate,' the senators wrote." Again, this bill is so urgent but they won't give up one of their endless recesses for it. So you're saying, "What the hell is in there about jobs? What's in there about jobs?" Here it is. What's in there about jobs is this. It "would exempt businesses from paying a 6.2 percent Social Security tax on the wages of new employees, as long as the workers have been unemployed at least 60 days. The tax break would run through the end of the year. A company could save a maximum of $6,621 if it hired an unemployed worker after the bill is enacted and paid that worker at least $106,800 -- the maximum amount of wages subject to Social Security taxes -- by the end of the year.

"The company could get an additional $1,000 on its 2011 tax return if it kept the new worker for at least a full year." I don't have to tell you what this is going to do. Guys are going to lay off people for two months, hire 'em back, and escape Social Security taxes. Let's just consider the incentives built into this plan. It forces businesses to hire people who got laid off earlier in the process -- which, in general, would indicate that they may have been more dispensable to their previous employers. People that got laid off first are generally the ones that were the least necessary. So in order to take advantage of the tax break, the business would have to keep them employed all year long (regardless of their performance), for a full-time worker and have to pay them the max, 106 grand, in order to escape $6,000 of taxes? Who's going to do that? Nobody's going to do this!

Pay somebody $106,000 in this climate, all for a $6,000 tax break? Plus somebody's been outta work for longer than two months? This... Let me put it directly: This subsidy is nothing more than the normal business decisions made by growing companies. This is not going to incentivize anybody in their right mind to start a hiring spree. Now, over at Bloomberg.com: "Small Business Has Some News for Big Government." This is Caroline Baum, and let me just summarize the story for you. The first line here is "'Washington doesn't get it,'" and there are numerous small business people quoted in the story. (begin summary) Dear Washington: We need sales, not new employee tax credits. That's Economics 101. You hire somebody if that worker generates revenues to cover his salary. For that you need sales! We're not interested in tax breaks. We're interested in the growth of our business. We are not here to fulfill Obama's promise to put people back to work. That's not why we're in business. (end summary) That's the message from the small businesses. It is absolute -- and that's all that's in there about jobs. The rest of this is nothing more than another slush fund spending bill, and I gave you all the details.

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