Q+A: What options does Obama have to boost hiring?

By Alister Bull

WASHINGTON (BestGrowthStock) – President Barack Obama is considering a number of options to try to jump-start job creation, the top priority for recession-weary Americans as the country heads toward congressional elections in November.

Obama unveiled one new initiative on Monday — a six-year plan to overhaul the United States’ aging highways, railways and airport runways with an initial investment of $50 billion in the first year.

He is expected to announce more initiatives on Wednesday, including extending a tax credit for companies for research and development. But is it all too little too late?

The Obama administration’s caution reflects the hard political truth that there are not enough votes in Congress to deliver another government spending bill to rival the $814 billion stimulus package he signed in 2009.

The White House is adamant it will not propose a second giant effort. In an election campaign in which opposition Republicans are playing on voters’ anxiety about record U.S. spending, “stimulus” has become a dirty word.

Republicans have castigated Obama for what they call reckless spending, sapping support for more action among Democrats in tight election races in November.

But deepening voter discontent over the stubbornly high 9.6 percent unemployment rate, means Obama has to do something to stimulate job growth, even though analysts agree he has few options and that there is little he can do before November’s elections.

Here are some questions and answers about what is already on the table and what Obama is reported to be considering.


— Obama will ask Congress on Wednesday to increase and permanently extend a tax credit for business research as a way of boosting job growth, administration officials say. The proposal would cost $100 billion over 10 years.

A one-year extension had already been written into legislation before Congress, and investors had assumed it would be made permanent.

— Obama announced on Monday a plan to rebuild 150,000 miles of roads; construct and maintain 4,000 miles of rail; and rehabilitate or reconstruct 150 miles of runway and modernize the air traffic control system.

The plan, dismissed by Republicans as a “last-minute, cobbled-together stimulus bill,” could be funded in part by rolling back tax breaks for oil and gas companies, the administration says. It will not have an immediate stimulative effect on hiring as it is not expected to generate new jobs until 2011. The Obama administration has no firm figure for the number of new jobs but says it will be “substantial.”


Obama will talk about several initiatives to stimulate the economy in a speech on Wednesday, but it is not clear whether he will offer new ideas or simply repeat Monday’s announcement while formally unveiling the business research tax proposal.

Here are some other ideas he is considering.

— Tax cuts to encourage hiring in the United States. This could include relief for employers to encourage hiring. It’s the kind of measure that might get Republican support in Congress, but not before the elections.

The White House is reported to be considering using revenue from expiring tax cuts for the wealthy to finance about $35 billion of tax cuts for small businesses and workers.

— Extending former President George W. Bush’s tax cuts for families earning less than $250,000 a year. Experts from the congressional Joint Committee on Taxation say this would cost $1.3 trillion over a decade, and add a further $700 billion if the tax cuts for richer Americans are also extended, as Republicans want.


— Getting Congress to agree to renewing Obama’s Making Work Pay tax credit of $800 for a married couple or $400 for individuals. Available for taxpayers who make less than $75,000 a year, it will expire at the end of 2010 unless Congress votes to extend it.

— Getting Congress to agree to extend long-term unemployment insurance again. This expires at the end of November unless Congress backs another extension.

— More bonus depreciation to encourage businesses to investment in capital equipment, which the revenue service allows them to write off at a faster pace, helping small business cash flow without producing a hefty price-tag for the deficit because the costs are pushed out into the future.


— Top Obama adviser Christina Romer, in her final speech as chairwoman of the White House Council of Economic Advisers, on Wednesday urged policymakers to find the will to act to spare the country the damage of high unemployment.

Growth slowed in the second quarter to 1.6 percent and other recent data has been mixed, keeping concerns alive that the economy could be heading toward a double-dip recession.

(Writing by Alister Bull and Ross Colvin; additional reporting by Kim Dixon; Editing by Eric Beech)

Q+A: What options does Obama have to boost hiring?