Jobs Act could kickstart economy

Courtesy Photo /
President Barack Obama

Courtesy photo

Courtesy Photo / President Barack Obama

Dan Spadafora

When President Barack Obama unveiled his plan to put Americans back to work two weeks ago, he knew for many citizens the speech had little to do with politics.

“The millions of Americans who are watching right now: they don’t care about politics,” Obama said. “They have real life concerns. Many have spent months looking for work… The purpose of the American Job Act is simple: to put more people back to work and more money in the pockets of those who are working.”

The five-section American Jobs Act proposal presented by Obama on Sept. 8 aims to get America back to work by creating tax incentives for small businesses and provide pathways for the unemployed to get back to work.

Although many of the proposed incentives look to improve the state of the small business owner and the economy, Mark Richards, political science department chair and associate professor at Grand Valley State University, said he sees the possible incentives for Michigan but that the entire bill may not be passed.

“It is unlikely that the bill will be passed as a whole,” he said. “Given Michigan’s dismal state of employment, provisions such as the payroll tax cut, business tax cuts and extension of unemployment benefits could have some positive effect. In addition, Michigan would be eligible for funds for rehiring teachers and first responders.”

Estimates from officials at the White House say that such incentives from the American Jobs Act would support around 12,000 jobs in Michigan.

Section one of the American Jobs Act is devoted towards helping small businesses hire and grow by proposing a temporary elimination of employer payroll taxes on wages for new workers or raises for existing workers.

The president is proposing a full holiday on the 6.2 percent payroll tax for any growth in a small businesses’ payroll up to $50 million for the prior year. The Congressional Budget Office is calling this proposal “the most effective of all tax cuts in supporting employment.”

Also highlighted in section one is a proposal extending 100 percent expensing into 2012, which would be the largest temporary investment incentive in history.

In reaction to the president’s speech and proposal, Governor Rick Snyder urged leaders in Washington, D.C., to continue to follow Michigan’s lead by balancing the budget, reduce debt and begin to save for the future.

“Half of all Jobs lost in the entire United States over the past decade were lost right here in Michigan,” Snyder said. “We are in a crisis and cannot afford to waste time on unproductive political posturing and partisan fighting. It’s time to make the tough decisions needed to reinvent Michigan and reinvent the United States.”

Besides providing tax breaks for small businesses, the American Jobs Act also looks to prevent layoffs of teachers, firefighters and police officers. In section two, $30 billion is proposed to prevent layoffs of up to 280,000 teachers while $5 billion is proposed to support hiring of firefighters and police officers.

Also in Section two is a proposed $25 billion to be used on modernizing school infrastructure of at least 35,000 public schools.

“The bill wouldn’t impact GVSU directly but it could indirectly benefit students or families of students who have been affected by the current economic malaise,” Richards said. “The bill would benefit students through retention or rehiring of public school teachers, as well as funds made available for renovation of public schools and community colleges.”

In section three of the American Jobs Act, Obama proposed tax credits for hiring long-term unemployed. The tax credit will be up to $4,000 for hiring someone who has been looking for a job for over six months.

“These are difficult years for our country,” Obama said. “But we are Americans. We are tougher than the times that we live in, and we are bigger than our politics have been. So let’s meet the moment. Let’s go to work and show the world once again why the United State of America remains the greatest nation on Earth.”

The full proposal of the American Jobs Act is available online at

[email protected]