The Congressional Budget Office on Friday said the American Jobs Act would not only help the economy but also reduce the deficit.
The nonpartisan “scorekeeper” lawmakers use to determine what effect a bill will have on the American people and the nation’s deficit gave President Barack Obama and Democrats another reason to keep pushing the American Jobs Act as a way to improve the economy. The budget office confirmed what the president has been saying, in that the jobs bill would be fully paid for over 10 years and that it would reduce the deficit. The office said the American Jobs Act as released by President Obama would have $447 billion in tax cuts and new spending and would raise $450 billion over 10 years, which would reduce the deficit by $3 billion over the course of a decade.
However, Senate Democrats this week decided to replace the president’s proposal of paying for the bill by taxing those individuals making more than $200,000 and families making more than $250,000 and instead place a 5.6 percent surtax on those individuals making $1 million or more. The CBO gave a better report for that method, saying doing that would raise $453 billion over 10 years and reduce the deficit by $6 billion over that time frame.
While the CBO said the American Jobs Act would help reduce the deficit – albeit by a miniscule amount compared to the overall size of the deficit – it also said it would help the economy and job growth in the short term.
“[It] could have a noticeable impact on economic growth and employment in the next few years,” the report said.
Despite those assessments, Republicans latched on to the portion of the report that said President Obama’s original bill would increase the short-term budget deficit in 2012 by $288 billion and $121 billion in 2013 – although President Obama’s original bill already has been modified with the Senate Democrats’ plan to change the “pay-fors” and is more than likely expected to see additional changes in some of the other proposals.
The Senate is expected to move forward on the American Jobs Act next week. The change to a millionaires tax was an attempt to win over more moderate-to-conservative Democrats who said they were reluctant to support the bill as it was because of the income level at which President Obama wanted to begin increasing taxes. The change was intended to get more Democrats on board, and possibly some moderate Republicans who are facing re-election in 2012.
Still, even if it were to pass the Senate, Republicans in the House of Representatives have said they would not even bring the bill up for a vote.
Like what you read? Want to read more about issues related with Democrats either nationally or in California?
Click SUBSCRIBE at the top of the page to receive email alerts when new articles are published.
Other articles Amanda has written can be found here.
If you have other ideas or tips on political news stories Amanda can or should cover, she can be emailed at [email protected]