Divide and Defeat the AJA

As was expected, the President’s American Jobs Act (AJA) was rejected in the Senate on a vote of 51-48 with two Democrats joining all Senate Republicans in blocking debate on the Bill.  There is absolutely no chance the AJA will be brought to a debate/vote in the House so the President’s only hope is to bust the AJA up into its pieces and vote on them one at a time.  As predictable as the descent of vultures after a fresh road kill, President Obama came out and attempted to progress his Do-Nothing-Republican meme by saying

We will now work with Senator Reid to make sure that the individual proposals in this jobs bill get a vote as soon as possible.  With each vote, Members of Congress can either explain to their constituents why they’re against common-sense, bipartisan proposals to create jobs, or they can listen to the overwhelming majority of American people who are crying out for action.”   

So let’s break up these 199 pages of fiction and see what major pieces should never be debated and explain why they are failures.  I’ve categorized each section using the headings in the AJA so you can search the actual text of the bill to verify my conclusions.

PART III – GENERAL PROVISIONS

This is the sections of the AJA that is basically a smaller version of the 2009 Stimulus that didn’t work.  Obama proposes various projects in airports, bridges, high speed rail and other transportation projects.  I’m all for improving our Infrastructure but can’t we do this with the existing $3.8 trillion our government spends?  Of course we can but that would mean cutting some of the $2.1 trillion from entitlement programs (Social Security, Welfare and Medicaid) that would anger the Liberal base of voters who demand those handouts as payment for their votes.

As if this extra spending, which has proven will not stimulate the economy, isn’t enough, the AJA also creates a new bureaucracy called the American Infrastructure Financing Authority (AIFA).  To quote the AJA,

“The AIFA shall provide direct loans and loan guarantees to facilitate infrastructure projects that are both economically viable and of regional or national significance, and shall have such other authority, as provided in this Act.” 

In other words, a new group will be created to do the political bidding of Liberals and provide loans to failing companies like Solyndra.   And as a final insult, section 259 of the AJA the bill provides $25 billion to $50 billion for administration of this new bureaucracy.   

SUBTITLE H – NATIONAL WIRELESS INITIATIVE

Obama wants to use the $18 billion to attack a phony spectrum scarcity problem.  Telecom companies are sitting on Billions of dollars of unused spectrum now so why should the government spend billions more to give them more spectrum to sit on?  And why use tax payers’ money to make it easier for Telecommunication companies to increase their profits?  What is next?  Will the government build retail stores for Target and Wal-Mart?  Will the government build automotive manufacturing facilities for General Motors?  Adding Telecommunication bandwidth is the job of Telecoms because they would be the ones to see profits from the expanded supply.  If there is an untapped wireless market then the Telecoms will build the infrastructure to reap those profits – that is how the Free Market works. 

And like the Infrastructure portion of the AJA, Section 284 also establishes another bureaucracy called the Public Safety Broadband Corporation (PSBC) and the role of this entity is unclear but Section 289 gives the National Telecommunications and Information Agency $50 billion dollars for administrative purposes to set up the PSBC.  

TITLE III – ASSISTANCE FOR THE UNEMPLOYED AND PATHWAYS BACK TO WORK

This portion of the AJA will extend unemployment benefits set to expire in January 2012 to January 2013. How convenient that this extends the handouts through the Presidential election in November of 2012.  It has been shown here that extending these benefits only hurts the economy by keeping unemployment high, providing no economic boost and only moderately increasing consumption.  Even President Obama’s new lead economic advisor, Alan Krueger, showed the fallacies of extending unemployment benefits in this paper.   A quote from the abstract of the paper states

“The empirical work on unemployment insurance (UI) and workers’ compensation (WC) insurance finds that the programs tend to increase the length of time employees spend out of work.”

TITLE IV – OFFSET

Now we get to how we’ll fund the AJA.  Those who fit into the following categories will have their deductions limited.

The taxpayer’s adjusted gross income is above—

(A) $250,000 in the case of a joint return within the meaning of section 6013,

(B) $225,000 in the case of a head of household return,

(C) $125,000 in the case of a married filing separately return. or

(D) $200,000 in all other cases

The AJA states that deductions for charitable contributions will be reduced from $0.35 for every dollar to $0.28 for every dollar.  This will reduce donations to charities and I can’t see how this would be good for the economy or the general welfare of our nation.  The AJA plans to soak the ‘rich’ which is really those individuals making over $200,000 per year.  I have shown here that this income demographic group accounts for 25.8% of all American Income but pays 50.2% of all income taxes.  They already pay twice their share so there is no further need to penalize them.

So let Harry Reid and Obama break up the AJA and try and pass it piecemeal.  The Republicans have more than enough ammunition to show why each and every part of the AJA is not what America needs right now.  We need to provide America with confidence that we are heading in the right direction and tax increases, new bureaucracy and Stimulus part II aren’t going to help that. 

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One Response to Divide and Defeat the AJA

  1. Pingback: What Would Obama Be Saying Now? | cosmoscon

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