What Can We Expect from President Obama’s Jobs Speech?

Tonight we’ll hear President Obama’s plan to spur job creation. In the month of August, we saw no new jobs created and national unemployment remained at 9.1 percent. If you take into account those that have stopped looking for work, the numbers are even more dismal. Reports have Obama’s jobs plan totaling between $300 billion and $400 billion and probably including the following:

1.  Extension of the Payroll Tax Deduction

This is aimed at putting more money in workers’ pockets. It projects to cost the government $120 billion while saving each household $1,000 in tax. Surprisingly, some Republicans oppose this measure as it continues the trend of underfunding entitlement programs. They would like a longer-term solution.

2.  Tax Holiday for Corporations

This measure would encourage companies to bring their overseas money back home to hire domestic workers. This is a positive strategy, but we need to find a way to make it beneficial for companies to avoid hiding their money overseas in the first place.

3.  Renew Unemployment Benefits

The President may get some real pushback on this part of the plan. Critics argue that the extension of unemployment benefits promotes a “welfare mentality.”

4.  Infrastructure

Another $100 billion would be used to rebuild schools, roads and bridges. After the fight over the debt ceiling and the apparent ineffectiveness of the President’s $800 billion stimulus measure, I would be surprised if this gets enacted.

Bottom Line

The President doesn’t appear to be trying to hit a home run with this plan. It doesn’t address any of the country’s long term problems, which might give employers and small businesses the confidence to engage in real job creation. However, if he gets enough enacted to move the unemployment rate down by early 2012, he’ll have something to build on in his re-election campaign. But don’t expect the Republicans to do him any favors.