The White House
Office of the Press Secretary
For Immediate Release
September 08, 2011
Fact Sheet: The American Jobs Act
THE AMERICAN JOBS ACT
1. Tax Cuts to Help Americafs Small Businesses Hire and
Grow
- Cutting the payroll tax in half for 98 percent of
businesses: The Presidentfs plan will cut in half the taxes paid by
businesses on their first $5 million in payroll, targeting the benefit to the
98 percent of firms that have payroll below this threshold.
- A complete payroll tax holiday for added workers or increased
wages: The Presidentfs plan will completely eliminate payroll taxes
for firms that increase their payroll by adding new workers or increasing the
wages of their current worker (the benefit is capped at the first $50 million
in payroll increases).
- Extending 100% expensing into 2012: This continues an
effective incentive for new investment.
- Reforms and regulatory reductions to help entrepreneurs and small
businesses access capital.
2. Putting Workers Back on the Job While Rebuilding and
Modernizing America
- A gReturning Heroesh hiring tax credit for veterans: This provides
tax credits from $5,600 to $9,600 to encourage the hiring of unemployed
veterans.
- Preventing up to 280,000 teacher layoffs,while keeping cops and
firefighters on the job.
- Modernizing at least 35,000 public schools across the
country,supporting new science labs, Internet-ready classrooms and
renovations at schools across the country, in rural and urban areas.
- Immediate investments in infrastructure and a bipartisan National
Infrastructure Bank, modernizing our roads, rail, airports and waterways
while putting hundreds of thousands of workers back on the job.
- A New gProject Rebuildh, which will put people to work
rehabilitating homes, businesses and communities, leveraging private capital
and scaling land banks and other public-private collaborations.
- Expanding access to high-speed wireless as part of a plan for
freeing up the nationfs spectrum.
3. Pathways Back to Work for Americans Looking for
Jobs.
- The most innovative reform to the unemployment insurance program in 40
years: As part of an extension of unemployment insurance to prevent 5
million Americans looking for work from losing their benefits, the Presidentfs
plan includes innovative work-based reforms to prevent layoffs and give states
greater flexibility to use UI funds to best support job-seekers, including:
- Work-Sharing: UI for workers whose employers choose work-sharing
over layoffs.
- A new gBridge to Workh program: The plan builds on and improves
innovative state programs where those displacedtake temporary, voluntary
work or pursue on-the-job training.
- Innovative entrepreneurship and wage insurance programs: States will
also be empowered to implement wage insurance to help reemploy older workers
and programs that make it easier for unemployed workers to start their own
businesses.
- A $4,000 tax credit to employers for hiring long-term unemployed
workers.
- Prohibiting employers from discriminating against unemployed
workers when hiring.
- Expanding job opportunities for low-income youth and adults through
a fund for successful approaches for subsidized employment, innovative
training programs and summer/year-round jobs for youth.
4. Tax Relief for Every American Worker and
Family
- Cutting payroll taxes in half for 160 million workers next year:
The Presidentfs plan will expand the payroll tax cut passed last year to cut
workers payroll taxes in half in 2012 – providing a $1,500 tax cut to the
typical American family, without negatively impacting the Social Security
Trust Fund.
- Allowing more Americans to refinance their mortgages at todayfs near 4
percent interest rates, which can put more than $2,000 a year in a
familyfs pocket.
5. Fully Paid for as Part of the Presidentfs Long-Term Deficit
Reduction Plan.To ensure that the American Jobs Act is
fully paid for, the President will call on the Joint Committee to come up with
additional deficit reduction necessary to pay for the Act and still meet its
deficit target. The President will, in the coming days, release a detailed plan
that will show how we can do that while achieving the additional deficit
reduction necessary to meet the Presidentfs broader goal of stabilizing our debt
as a share of the economy.
AMERICAN JOBS ACT
OVERVIEW
The American people understand that the economic crisis and the deep
recession werenft created overnight and wonft be solved overnight. The economic
security of the middle class has been under attack for decades. Thatfs why
President Obama believes we need to do more than just recover from this economic
crisis – we need to rebuild the economy the American way, based on balance,
fairness, and the same set of rules for everyone from Wall Street to Main
Street. We can work together to create the jobs of the future by helping
small business entrepreneurs, by investing in education, and by making things
the world buys. The President understands that to restore an American economy
thatfs built to last we cannot afford to outsource American jobs and encourage
reckless financial deals that put middle class security at risk.
To create jobs, the President unveiled the American Jobs Act – nearly all of
which is made up of ideas that have been supported by both Democrats and
Republicans, and that Congress should pass right away to get the economy moving
now. The purpose of the American Jobs Act is simple: put more people back to
work and put more money in the pockets of working Americans. And it would do so
without adding a dime to the deficit.
Tax Cuts to Help Americafs Small Businesses Hire and
Grow
New Tax Cuts to Businesses to Support Hiring and
Investment:The President is proposing three tax cuts to provide
immediate incentives to hire and invest:
- Cutting the Payroll Tax Cut in Half for the First $5 Million in
Wages:This provision would cut the payroll tax in half to 3.1% for
employers on the first $5 million in wages, providing broad tax relief to all
businesses but targeting it to the 98 percent of firms with wages below this
level.
- Temporarily Eliminating Employer Payroll Taxes on Wages for New
Workers or Raises for Existing Workers:The President is proposing a
full holiday on the 6.2% payroll tax firms pay for any growth in their payroll
up to $50 million above the prior year, whether driven by new hires, increased
wages or both. This is the kind of job creation measure that CBO has called
the most effective of all tax cuts in supporting employment.
- Extending 100% Expensing into 2012:The President is
proposing to extend 100 percent expensing, the largest temporary investment
incentive in history, allowing all firms – large and small – to take an
immediate deduction on investments in new plants and equipment.
- Helping Entrepreneurs and Small Businesses Access Capital and
Grow: The Presidentfs plan includes administrative, regulatory and
legislative measures – including those developed and recommended by the
Presidentfs Jobs Council – to help small firms start and expand. This includes
changing the way the government does business with small firms. The
Administration will soon announce a plan to accelerate government payments to
small contractors to help put money in their hands faster. The President is
also charging his CIO and CTO to, within 90 days, stand up a one-stop, online
portal for small businesses to easily access government services. As part of
the Presidentfs Startup America initiative, the Administration will work with
the SEC to conduct a comprehensive review of securities regulations from the
perspective of these small companies to reduce the regulatory burdens on small
business capital formation in ways that are consistent with investor
protection, including expanding gcrowdfundingh opportunities and increasing
mini-offerings. Finally, the Presidentfs plan calls for Congress to pass
comprehensive patent reform, increase guarantees for bonds to help small
businesses compete for infrastructure projects and remove burdensome
withholding requirements that keep capital out of the hands of job creators.
Putting Workers Back on the Job While
Rebuilding and Modernizing America
- Tax Credits and Career Readiness Efforts to Support Veteransf
Hiring:The President is proposing a Returning Heroes Tax Credit of up
to $5,600 for hiring unemployed veterans who have been looking for a job for
more than six months, and a Wounded Warriors Tax Credit of up to $9,600 for
hiring unemployed workers with service-connected disabilities who have been
looking for a job for more than six months, while creating a new task force to
maximize career readiness of servicemembers.
- Preventing Layoffs of Teachers, Cops and Firefighters:The
President is proposing to invest $35 billion to prevent layoffs of up to
280,000 teachers, while supporting the hiring of tens of thousands more and
keeping cops and firefighters on the job. These funds would help states and
localities avoid and reverse layoffs now, requiring that funds be drawn down
quickly. Under the Presidentfs proposal, $30 billion be directed towards
educators and $5 billion would support the hiring and retention of public
safety and first responder personnel.
- Modernizing Over 35,000 Schools – From Science Labs and
Internet-Ready Classrooms to Renovated Facilities:The President is
proposing a $25 billion investment in school infrastructure that will
modernize at least 35,000 public schools – investments that will create jobs,
while improving classrooms and upgrading our schools to meet 21st
century needs. This includes a priority for rural schools and dedicated
funding for Bureau of Indian Education funded schools. Funds could be used for
a range of emergency repair and renovation projects, greening and energy
efficiency upgrades, asbestos abatement and removal, and modernization efforts
to build new science and computer labs and to upgrade technology in our
schools. The President is also proposing a $5 billion investment in
modernizing community colleges (including tribal colleges), bolstering their
infrastructure in this time of need while ensuring their ability to serve
future generations of students and communities.
- Making an Immediate Investment in Our Roads, Rails and
Airports: The Presidentfs plan includes $50 billion in immediate
investments for highways, transit, rail and aviation, helping to modernize an
infrastructure that now receives a grade of gDh from the American Society of
Civil Engineers and putting hundreds of thousands of construction workers back
on the job. The Presidentfs plan includes investments to improve our airports,
support NextGen Air Traffic Modernization efforts, and resources for the TIGER
and TIFIA programs, which target competitive dollars to innovative multi-modal
infrastructure programs. It will also take special steps to enhance
infrastructure-related job training opportunities for individuals from
underrepresented groups and ensure that small businesses can compete for
infrastructure contracts.The President will work administratively to speed
infrastructure investment through a recently issued Presidential Memorandum
developed with his Jobs Council directingdepartments and agencies to identify
high impact, job-creating infrastructure projects that can be expedited in a
transparent manner through outstanding review and permitting processes. The
call for greater infrastructure investment has been joined by leaders from
AFL-CIO President Richard Trumka to U.S. Chamber of Commerce President Thomas
Donohue.
- Establishing a National Infrastructure Bank:The President
is calling for Congress to pass a National Infrastructure Bank capitalized
with $10 billion, in order to leverage private and public capital and to
invest in a broad range of infrastructure projects of nationaland regional
significance, without earmarks or traditional political influence. The Bank
would be based on the model Senators Kerry and Hutchison have championed while
building on legislation by Senators Rockefeller and Lautenberg and the work of
long-time infrastructure bank champions like Rosa DeLauro and the input of the
Presidentfs Jobs Council.
- Project Rebuild: Putting People Back to Work Rehabilitating Homes,
Businesses and Communities. The President is proposing to invest $15
billion in a national effort to put construction workers on the job
rehabilitating and refurbishing hundreds of thousands of vacant and foreclosed
homes and businesses. Building on proven approaches to stabilizing
neighborhoods with high concentrations of foreclosures, Project Rebuild will
bring in expertise and capital from the private sector, focus on commercial
and residential property improvements, and expand innovative property
solutions like land banks. This approach will not only create construction
jobs but will help reduce blight and crime and stabilize housing prices in
areas hardest hit by the housing crisis.
- Expanding Access to High-Speed Wireless in a Fiscally Responsible
Way: The President is calling for a deficit reducing plan to deploy
high-speed wireless services to at least 98 percent of Americans, including
those in more remote rural communities, while freeing up spectrum through
incentive auctions, spurring innovation, and creating a nationwide,
interoperable wireless network for public safety.
Pathways Back to Work for Americans Looking for
Jobs
- Reform Our Unemployment Insurance System to Provide Greater
Flexibility, While Ensuring 6 Million People Do Not Lose Benefits:
Drawing on the best ideas of both parties and the most innovative states, the
President is proposing the most sweeping reforms to the unemployment insurance
(UI) system in 40 years help those without jobs transition to the workplace.
Alongside these reforms, the President is reiterating his call to extend
unemployment insurance, preventing 6 million people looking for work from
losing their benefits and extending what the independent Congressional Budget
Office has determined is the highest gbang for the buckh option to increase
economic activity.
- Reemployment Assistance: States will be required to design
more rigorous reemployment services for the long-term unemployed and to
conduct assessments to review the longest-term claimants of UI to assess their
eligibility and help them develop a work-search plan. These reforms are
proven to speed up UI beneficiariesf return to work.
- Work-sharing:The President will expand gwork-sharingh to
encourage arrangements using UI that keep employees on the job at reduced
hours, rather than laying them off.
- State Flexibility for Bold Reforms to Put the Long-Term Unemployed
Back To Work:The President is proposing to provide additional funds
to allow states to introduce new programs aimed at long-term unemployed
workers, including:
- gBridge to Workh Programs:States will be able to put in
place reforms that build off what works in programs like Georgia Works or
Opportunity North Carolina, while instituting important fixes and reforms that
ensure minimum wage and fair labor protections are being enforced. These
approaches permits long-term unemployed workers to continue receiving UI while
they take temporary, voluntary work or pursue work-based training. The
Presidentfs plan requires compliance with applicable minimum wage and other
worker rights laws.
- Wage Insurance: States will be able to use UI to
encourage older, long-term unemployed Americans to return to work in new
industries or occupations.
- Startup Assistance: States will have flexibility to
help long-term unemployed workers create their own jobs by starting their own
small businesses.
- Other Reemployment Reforms: 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.
- Tax Credits for Hiring the Long-Term Unemployed:The
President is proposing a tax credit of up to $4,000 for hiring workers who
have been looking for a job for over six months.
- Investing in Low-Income Youth and Adults: The
President is proposing a new Pathways Back to Work Fund to provide hundreds of
thousands of low-income youth and adults with opportunities to work and to
achieve needed training in growth industries. The Initiative will do three
things: i) support summer and year-round jobs for youth, building off of
successful programs that supported over 370,000 such jobs in 2009 and 2010;
ii) support subsidized employment opportunities for low-income individuals who
are unemployed, building off the successful TANF Emergency Contingency Fund
wage subsidy program that supported 260,000 jobs in 2009 and 2010; and iii)
support promising and innovative local work-based job and training initiatives
to place low-income adults and youths in jobs quickly.
- Prohibiting Employers from Discriminating Against Unemployed
Workers: The Presidentfs plan calls for legislation that would make it
unlawful to refuse to hire applicants solely because they are unemployed or to
include in a job posting a provision that unemployed persons will not be
considered.
More Money in the Pockets of Every American Worker
and Family
- Cutting Payroll Taxes in Half for 160 Million
Workers Next Year: The
Presidentfs plan will expand the payroll tax cut passed last December by
cutting workers payroll taxes in half next year. This provision will provide a
tax cut of $1,500 to the typical family earning $50,000 a year. As with the
payroll tax cut passed in December 2010, the American Jobs Act will specify
that Social Security will still receive every dollar it would have gotten
otherwise, through a transfer from the General Fund into the Social Security
Trust Fund.
- Helping More Americans Refinance Mortgages at Todayfs
Historically Low Interest Rates: The President has instructed
his economic team to work with Fannie Mae and Freddie Mac, their regulator the
FHFA, major lenders and industry leaders to remove the barriers that exist in
the current refinancing program (HARP) to help more borrowers benefit from
todayfs historically low interest rates. This has the potential to not only
help these borrowers, but their communities and the American taxpayer, by
keeping borrowers in their homes and reducing risk to Fannie Mae and Freddie
Mac.
Fully Paid for as Part of the Presidentfs Long-Term
Deficit Reduction Plan.
- To ensure that the American Jobs Act is fully paid for, the President will
call on the Joint Committee to come up with additional deficit reduction
necessary to pay for the Act and still meet its deficit target. The President
will, in the coming days, release a detailed plan that will show how we can do
that while achieving the additional deficit reduction necessary to meet the
Presidentfs broader goal of stabilizing our debt as a share of the economy.
|
$, bn |
Tax Cuts to Help Americafs Small Businesses Hire and
Grow |
70 |
|
Cut employer payroll taxes in half & bonus payroll cut for new
jobs/wages |
65 |
|
Extend 100% expensing in 2012 |
5 |
Putting Workers Back on the Job While Rebuilding and
Modernizing America |
140 |
|
Teacher rehiring and first responders |
35 |
|
Modernizing schools |
30 |
|
Immediate surface transportation |
50 |
|
Infrastructure bank |
10 |
|
Rehabilitation/repurposing of vacant property (neighborhood
stabilization) |
15 |
|
National wireless initiative |
0* |
|
Veterans hiring initiative |
n.a. |
Pathways Back to Work for Americans Looking for
Jobs |
62 |
|
UI Reform and Extension |
49 |
|
Jobs tax credit for long term unemployed |
8 |
|
Pathways back to work fund |
5 |
More Money in the Pockets of Every American Worker and
Family |
175 |
|
Cutting employee payroll taxes in half in 2012 |
175 |
TOTAL |
447 |
* Proposal has a gross cost of $10bn, but a net deficit reducing impact
of $18bn because of spectrum auction proceeds.