Obama's Gift

http://www.futureofcapitalism.com/2011/09/obama-gift

President Obama has gotten to the point with me that by merely giving a speech in favor of something, he can turn me against policies that I believe in and support. The two big examples in the "American Jobs Act" are unemployment insurance reform and tax cuts.

I've been agitating here for unemployment insurance reform for weeks. A White House fact sheet indicates Mr. Obama has adopted many of my suggestions, including, as the White House puts it, "States will be able to seek waivers from the Secretary of Labor to implement other innovative reforms to connect the long-term unemployed to work opportunities" and "States will have flexibility to help long-term unemployed workers create their own jobs by starting their own small businesses." I'd prefer these programs apply to all unemployed workers rather than just "long-term," and I'd prefer the states have the flexibility as of right rather than having to seek permission from the secretary of labor. But even so, it's a step in the right direction by recognizing that unemployment benefits, as currently constituted, create incentives to stay unemployed.

The "American Jobs Act" also includes some significant tax cuts: not just extending the payroll tax cut for employees, but expanding it by "cutting employee payroll taxes in half in 2012" at a "cost" the White House estimates at $175 billion. The president would also cut employer payroll taxes in half for all companies on the first $5 million a year they pay in wages, at an estimated "cost" (with one other tax cut) of $65 billion. Given that Mr. Obama has been talking mostly about raising taxes, not cutting them, this is a step in the right direction. I'd prefer to eliminate payroll taxes altogether, removing a compliance burden from employers, who somewhere along the line became deputized as tax collectors. And I'd prefer that these changes be permanent rather than just for 2012, which would change the "cost" estimates dramatically. By changing the payroll tax in 2012 from what it was in 2011 (which was itself a change from what it was in 2009 and 2010, when the "Making Work Pay" tax credit applied), the president's plan adds Washington-related uncertainty for job-creators rather than subtracting it.

The problem was that Mr. Obama couched all this in a speech so preachy, insistent, and divisive that it makes the whole thing repellant, no matter what the policy merits. "You should pass it right away," he said, repeating "right away" so often he managed to sound like a cross between a truculent child and an impatient parent. Again with Warren Buffett: "Right now Warren Buffett pays a lower tax rate than his secretary, an outrage he has asked us to fix." And again with the attack on oil companies and "tax breaks for millionaires and billionaires." Pronounced the president: "This isn't political grandstanding. This isn't class warfare."

Hint: If you feel like the audience needs explicit reassurance that it "isn't class warfare" and "isn't political grandstanding," maybe the substance and tenor of the remarks are worth reviewing and revising ahead of time so as to make such a reassurance unnecessary? If the speaker has to go to the trouble of insisting that it isn't class warfare, it's a pretty good indication that what the speaker is up to is class warfare. No wonder Mr. Obama is saving the "pay-fors" on all this for a separate speech.

by Ira Stoll  |  Sep 8, 2011 at 8:51 pm Related Topics:  Politics, President Obama, Taxes, Unemployment, Warren Buffett receive the latest by email: subscribe to the free futureofcapitalism.com mailing list