Jobs Bill Won't Lead to Many New Jobs

Congress recently passed a bill designed to increase hiring of unemployed workers.

"Today, U.S. Senator Charles E. Schumer announced that his bipartisan “Hire Now Tax Cut” proposal to provide businesses that hire unemployed workers with a tax cut has cleared final passage in Congress and will now go to the President’s desk for signature.

The businesses will avoid paying the employer’s share of Social Security taxes on that worker for the duration of 2010.

The more a business pays a worker (up to the maximum Social Security wage of $106,800), and the longer a business has a worker on its payroll, the greater the tax benefit – so there is an incentive to hire people sooner, and pay them more."

Basically, this bill will enable an employer to save perhaps a total of 5% of the total compensation that it pays a given employee in 2010.

Given such a modest savings, it is extremely unlikely that the bill will make a meaningful dent in today's unemployment picture. Employers remain concerned about demand, so having slightly cheaper workers with which to produce more goods or provide more services does not alleviate that overriding concern.

More importantly, what's the principle here? Is it that tax cuts hopefully facilitate more economic activity (hiring, demand, etc.)? If that's the case, let's have more of it, and less spending and confiscation by the government.

Black Caucus Opposes Recent Jobs Bill

The Congressional Black Caucus has come out in opposition to the Jobs Bill that recently passed the Senate.

"I'm offended that it's been called a jobs bill," CBC Vice Chairman Emanuel Cleaver (D-Mo.) told reporters. "I will not stand up in the district that I represent... and say we just did a jobs bill. I think people are smarter than that. This is a tax cut bill and a little piece of a transportation bill."

It is wonderful news that the Black Caucus is coming out forcibly against the Senate window dressing evidenced by this bill and is looking for real, tangible, concrete action from Congress on jobs.

Unfortunately for the Black Caucus, what would really create jobs at this point is a set of permanent, long-lasting economic policies that they would more than likely find to be unpalatable to their personal beliefs and to their primary benefactors:

1) Sharply reduced individual and corporate tax rates
2) Reduced government regulation
3) Elimination of minimum wage laws
4) Significant down-sizing of government bureaucracies

These are just a few of the measures that, if taken, would put all Americans back on the road to prosperity and create the jobs the Black Caucus talks about being in favor of.

Senator Brown Already Compromised

The fair-haired golden boy of the Conservative movement, Senator Scott Brown (R-MA), has within a few weeks of taking office already been a key vote on a bill that once again sees the government giving favors to certain sectors of the population at the expense of others.

"Brown and four other Republicans broke with GOP leaders to advance the measure. Most other Republicans opposed the bill because Democratic Majority Leader Harry Reid of Nevada stripped out provisions they had sought and wouldn't allow them to try to restore them.

The bill featured four provisions that enjoyed sweeping bipartisan support, including a measure exempting businesses hiring the unemployed from Social Security payroll taxes through December and giving them another $1,000 credit if new workers stay on the job a full year."

Even if this bill creates the 250,000 jobs that its supporters claim it might (and that, by the way, is highly, highly dubious), it really represents continued efforts of Congress and the Presidency to essentially create winners and losers via the tax code.

The sooner Senator Brown realizes that Congress should be focused on spending cuts that are not offset under pay-go rules with tax hikes, that a principled reform of the tax code is absolutely necessary to reduce its annual take and that it's not the job of Congress to either "stimulate" the economy or to decide which constituent is currently worthy of largess, the faster America can recover from the damage its politicians have created.