The House passed a slightly modified version of the $15 billion jobs bill Thursday, which eliminates payroll taxes for new hires this year. Will it work? Depends on your definition of work. The Congressional Budget Office considered the impact of payroll tax exemptions for new hires on job creation and concluded that $15 billion could create the equivalent of 120,000 and 270,000 full-time jobs in 2010 and 2011. That's potentially 200,000 families with more money to spend throughout the economy, pay their mortgage, begin to erase their debt and so forth. But this number needs perspective. The United States requires 200,000 new jobs created each month for the next seven years to hit 5 percent unemployment by 2017.
One of the Democrats who voted against it had this to say (via NYT):
"We should stop calling it a jobs bill, and instead acknowledge this is about business tax cuts," said Representative Barbara Lee, a California Democrat.
She meant that as an argument against the bill. But I wonder if it's a good tactic nonetheless. Let's be super-sanguine and assume this jobs bill adds 300,000 jobs in 2010 and 2011 against an army of unemployed that today sits at 15 million people. This is not going to move the official unemployment rate significantly. In the next few weeks and months, it's important for Democrats to convince Americans that their first priority is "jobs, jobs, jobs." But if by October Americans aren't seeing jobs (much less jobs, jobs, jobs) what will they blame: underlying weakness in the economy, or broken Democratic promises? The former is amorphous. The latter has a face and a re-playable sound bite.
I'm just thinking out loud here. But maybe emphasizing this $15 billion as a business tax cut rather than an employment elixir is a better political argument for the bill than against it.