Obama Jobs Plan will Actually Increase Deficit

| by CEI

By Hans Bader

The AP fact checkers took issue with President Obama’s claims about his new $450 billion federal “jobs” plan:

President Barack Obama’s promise Thursday that everything in his jobs plan will be paid for rests on highly iffy propositions. . .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.

The Associated Press also rebutted Obama’s claim that his proposal would not increase the deficit, as if all the new spending Obama is pushing could be paid for out of money conjured up out of thin air:

OBAMA: “It will not add to the deficit.”

THE FACTS: It’s hard to see how the program would not raise the deficit . . . The accumulation of years of deficit spending has produced a national debt headed toward $15 trillion.

Earlier, we discussed how Obama’s proposal, the misnamed “American Jobs Act,” would pay off liberal constituencies like Big Labor and teacher’s unions, subsidize pork and boondoggles, while massively increasing the national debt and thus reducing the size of the economy over the long run by crowding out private investment.  My earlier assessment was based on very general press reports about the proposal, not its precise details, but Michael Barone of the Washington Examiner later reached similar conclusions after additional details became available.  Hiscommentary sheds additional light on the boondoggles that taxpayers would be forced to pay for under the bill, how it is not in fact “paid for,” and how Obama relied on misleading  arguments and “straw men” in his speech.

The AP also noted that “even supporters” of Obama’s proposed infrastructure “bank doubt it could have much impact on jobs in the next two years,” contrary to Obama’s claims.

Even many liberal commentators conceded that the proposal lacked any new ideas about how to create jobs.  Hendrik Hertzberg said the Obama Administration’s so-called “American Jobs Act” was “assembled mostly from refurbished spare parts collected from their own ideological warehouse.”  Felix Salmon ridiculed Obama’s claims that the bill was “paid for,” saying of Obama’s pledge to cut spending in the distant future to offset the cost of the proposal, “That’s not paying for a bill, it’s passing the buck to someone else.”  Howard Gleckman of the Urban Institute noted that the bill’s incentives to hire certain preferred categories of workers (like “low-income youth”) “will encourage firms to employ targeted workers, but at the expense of those who are not on the preferred list,” rather than resulting in increased hiring.

A CEO who was invited to the speech said that Obama’s words contradicted his actions and that his policies have “done untold damage.”

National Review notes that some of Obama’s costly proposals would backfire: “Obama wants a larger tax credit for companies that hire people who have been unemployed for six months or longer, which seems like an incentive for companies to fire some of their employees, replace them with eligibles, and pocket the credit. (It’s also an incentive for people not to take job offers if they are close to the six-month mark.)”