Obama Shelves Jobs-Credit Proposal

Washington Post: Democrats Complained $3,000 Tax Incentive Could Be Abused by Businesses

(Washingtonpost.com)  This story was written by Shailagh Murray

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Bowing to widespread Democratic skepticism, President-elect Barack Obama will drop his bid to include a business tax break he once touted in the economic stimulus bill now taking shape on Capitol Hill, aides said last night.

Obama suggested the $3,000-per-job credit last week as one of five individual and business tax incentives aimed at winning Republican support. He proposed $300 billion in tax relief in a bill that could reach $775 billion, and he resurrected the jobs-credit proposal from the campaign trail as one of his main provisions.

Republicans reacted favorably to the higher-than-expected ratio of tax breaks to spending for road projects, alternative energy production, health-care technology and unemployment benefits. But they offered mixed reviews of his specific tax proposals and floated their own, including cuts in corporate and capital gains taxes.

Stronger opposition came from Democrats, who dismissed the $3,000 credit to employers for every job created or saved as ripe for abuse and difficult to administer. When no champion for the proposal came forward, the president-elect decided to sideline the incentive.

"We've always said we're open to other ideas. This was never set in stone," said a senior Obama adviser of the decision.

Congressional leaders are aiming to deliver a stimulus bill to Obama's desk in the White House by mid-February, but as the process unfolds, the legislation appears to be growing in size and complexity.

The stimulus and a separate financial rescue package, which is also meeting with objections from lawmakers, are aimed at preventing the economy from sliding further. But Congress has expressed reluctance to rush through such expensive bills without careful consideration of the details.

Even before assuming office, Obama is taking an unusually direct role in legislative efforts to move both bills forward, personally phoning lawmakers and dispatching senior aides to Capitol Hill on a near-daily basis. Today the president-elect will speak to Senate Democrats at their weekly luncheon, and he will soon appear before House Democrats, although a date has not been set, a senior Obama aide said.

Obama expects to meet with Republicans in both chambers, the aide added, although not until after he is inaugurated next Tuesday.

Former Treasury secretary Lawrence H. Summers, who will serve as Obama's chief White House economic adviser, is scheduled to meet this afternoon with House Ways and Means Committee members, to begin crafting tax provisions for the stimulus bill.

Obama advisers said further adjustments may be made to the president-elect's tax priorities, including to a proposed $500 payroll tax credit for individuals. Many Democrats have criticized Obama's idea of distributing the benefit over 12 months, saying it would amount to about $20 per paycheck for workers who are paid every two weeks. They would prefer to distribute the credit over a shorter period.

Obama also has suggested tax incentives for businesses to make capital investments. Such benefits are popular across party lines and have been successful in recent years. But another Obama proposal, to allow companies to deduct larger portions of recent losses, has raised eyebrows on the Hill, where lawmakers see it as a costly reward for behavior that was possibly irresponsible.

Ways and Means Committee Chairman Charles B. Rangel (D-N.Y.) announced last week that he would seek to increase unemployment benefits in the plan. Democrats also are floating generous incentives for domestic energy production and for college tuition relief.

[win4usa]

The unemployed and senior citizens are the ones that really need the tax break.

[lewiston14]

It really bothers me that OB thinks $10 a week is going to do anything. Might as well throw it into a fire. What about the people on SSI or disibility ones that are truly to old or to messed up to work. They got to eat to execpt the system is eating them. Hey most of them are your parents. Without them you would not be here and sometimes you wonder if that is a good thing or a bad thing. $10 is not going to do it $100 is not going to do it $10,000 is not going to do it. $50.000 might if the first thing thay make you do is go buy a new American made car then work on you mortage. Remember that $600 you got last year that is income and they are going to want ~25 percent back this year. Naturally an other choice is to get jobs in this country and giant size the import taxes to the point here that ever a Customer call service call from another get hit with a $10 charge that does not come out of a US Customer pocket.

[wolf77creek]

The plan is a slap in the face to the working class people of the United States. They are spending billions of our dollars to "save" the automotive, banking, insurance etc industries, & the people that would buy or use their products have "no" money!! A smarter way to "save" these indutries is to put a substantial amount of money in the hands of the people that need & will use it. The small amount proposed is a slap in the face to all of us, so much for a government that is "for the people" "by the people". We have no say in anything, the government does what ever they want to do based on how much money greases their palms, & the hell with the rest of us.

[standlee5]

Democrats Complained $3,000 Tax Incentive Could Be Abused by Businesses"

Does that just say it all, or what? They hate business. They mistrust business. If they only had the same attitude and scrutiny for the GOVT.

[standlee5]

Those who PAY taxes, the ones who actually PAY taxes should have more say in the country then those who don''t and have never paid. These days between the child tax credits and massive EITC there are 40% non-payers. That''s incredible. Those of us who pay need to revolt BIG TIME before it''s too late and we''re a minority. Then we might as well just hand the govt. everything we have.

[standlee5]

The unemployed and senior citizens are the ones that really need the tax break.
Posted by win4usa at 01:00 PM : Jan 13, 2009

Are you serious? Because this is exactly what''s wrong with the country. People THINK they pay taxes when most don''t.

[wardoglrs]

Any one who pays a tax to government is a slave. Were in the constitution does it state that the people to pay out of there labor to a government.

Obama is taking orders from his New Neo Con friends and you all should by now see that Obama is as fake as a cheap tin cup.

Obama isn''t worth the sweat off my ball''s

[missingamerica]

"including cuts in corporate and capital gains taxes."

Gee, what a shock. OK, give them their tax breaks - and then shoot everybody who invests one thin dime of their savings into offshore factories or investments.

Then disperse their estates into their economy, because being Republicans, you KNOW they will not be able to put their country before the opportunity to make money.