New Deal: Business likes Obama plan

[one...two...tree 2,762]

By Kevin Bogardus, The Hill

Big business is lining up to support President-elect Obama's plan to stimulate the economy with the biggest spending spree on roads, bridges and other infrastructure projects since the Eisenhower administration.

Business groups believe injecting funds into rebuilding America's roads and highways could put thousands back to work at a time of rising unemployment. As a result, lobbyists from the U.S. Chamber of Commerce and the National Association of Manufacturers (NAM) are asking lawmakers and Obama's transition team to funnel federal funds to "shovel-ready" projects as the best way to stimulate the flagging economy.

"Our view is we need significant investments in the nation's infrastructure to meet the needs of the 21st century," said Aric Newhouse, NAM's senior vice president of policy and government relations.

"Most important to us is that President-elect Obama is focused on putting money into real projects that are ready to go," said Janet Kavinoky, director of transportation infrastructure at the Chamber.

Support from business groups that generally are aligned with Republicans could help move Obama's stimulus legislation forward. House Minority Leader John Boehner (R-Ohio) last week voiced opposition to public spending projects, arguing that "now is not the time to make matters even worse by asking taxpayers to pay for a slate of new government spending in the name of 'economic stimulus.' " He argued for tax cuts to stimulate the economy.

Not every GOP-leaning business lobby is as excited about Obama's plans.

Jade West, senior vice president of government relations for the National Association of Wholesalers-Distributors (NAW), said her trade group is worried the massive spending — lawmakers have talked of spending $500 billion to $700 billion for Obama's stimulus — could lead to substantial tax hikes in years to come.

"There is no better way to kill an economic recovery than to raise taxes, even by Congress failing to extend the 2001 and 2003 cuts," West said, referring to the Bush tax cuts. NAWD has not taken a position on Obama's stimulus proposal.

At the same time, West said it's possible the public spending might be necessary to deal with a recession that some economists say could be the worst in decades.

"It is an alarming amount of money, but we might need to spend that kind of money to kick-start the economy," West said.

So far, Obama has backed away from campaign pledges to repeal the Bush tax cuts on the wealthiest Americans, although he and his advisers have signaled that they would let the tax cuts expire in 2010. Many economists believe raising taxes during a recession would hurt the economy.

Obama also has backed away from pledges to impose a tax on oil companies' windfall profits as the price of oil has fallen to below $50 a barrel.

Other business groups agree tax hikes could prolong the economic downturn.

"More taxes can slow down economic growth and put additional jobs at risk," Newhouse said.

Fears that the massive spending could lead to future tax hikes aren't diminishing the Chamber's or NAM's support for infrastructure spending. The Chamber will hold an all-day event Tuesday to highlight the need for infrastructure spending. The conference features a number of speakers from business, as well as Pennsylvania Gov. Ed Rendell (D) and Sen. Mary Landrieu (D-La.).

Both groups have previously called for public infrastructure spending. NAM President John Engler, a former Republican governor of Michigan, offered support in congressional testimony last month. The Chamber also chimed in with a letter to lawmakers that said spending money quickly on near-term transportation infrastructure projects would stimulate the economy.

At the same time, the business lobby is pressing for a series of specific tax cuts to accompany any spending.

They argue this will help employers avoid cutting workers as they struggle with the faltering economy.

The National Federation of Independent Business (NFIB) is lobbying for Obama to include a payroll tax holiday in the stimulus. Bill Rys, NFIB's tax counsel, says suspending the tax could increase spending and reduce job losses.

"You can't ignore the fact that the weakness in the economy is with spending. If you remove the payroll tax, that would give an incentive to spend again," Rys said. "It puts money back in the pockets on both sides of the economy."

NAM is also lobbying for a re-examination of corporate tax rates as well as a reduction in taxes on income American companies earn abroad and return to the U.S. "It creates a disincentive to move funds around the world. If you need money here for capital investment, it makes it very expensive to do so," Newhouse said.

A number of trade groups have begun assembling lists of infrastructure projects that are "shovel-ready" once they are funded by the federal government. Work could begin on them with little or no lag time.

For example, the American Association of State Highway and Transportation Officials has assembled a catalog of 5,000 projects across the country that need about $64 billion in funds before they can be initiated.

"The stimulus is going to serve as a down payment on some of that backlog," Kavinoky said.

The market rallied Monday with the weekend news of Obama's spending plans. The Dow Jones Industrial Average finished nearly 300 points up at the market's close, as investors hoped the stimulus package would put people to work and add to consumers' coffers.

Obama promised the huge investment one day after the Bureau of Labor Statistics reported 533,000 jobs were lost in the month of November, the largest monthly drop in employment since 1974.

http://thehill.com/leading-the-news/new-de...08-12-08_2.html

[kaydee457 13]

The market rallied Monday with the weekend news of Obama's spending plans. The Dow Jones Industrial Average finished nearly 300 points up at the market's close, as investors hoped the stimulus package would put people to work and add to consumers' coffers.

Really? The markets tanked the next day...Go figger?

The "New Deal" is nothing more than big government attempting to do what Corporations and small business do in a capitalist society if given incentive to do so.

The jobs created by this "New Deal" are low paying, temporary in most cases, and mostly unskilled. They do nothing to improve our Global competitiveness in the short term, or in any term, period.

It's never a good thing when millions of people are beholden to the government, and the Dem's for their livelihood.

Sure infrastructure is necessary, but if it wasn't budgeted last year, there's reason to believe that it isn't needed this year.

Already stories are surfacing about Golf Course improvements, Tennis Courts, Bike Paths, and other projects that will benefit from a "Jobs" program....

Clearly the best approach is to do tax cuts, particularly reducing the Capital Gains tax to zero. Watch the Dow soar after that!

[rebeccajo 14]

Number One - I don't understand the concept of a payroll tax holiday as an economic stimulus UNLESS the income tax schedules are also adjusted. This could potentially cause many taxpayers to owe income tax when they file the annual return because enough tax was not withheld from their wages for that year.

Number Two - I'm tired of hearing people rant about 'capitalism' and the corruption of it. We don't have a true capitalist economy in the US. If we did, the federal tax code would not be slanted with paper deductions and incentives to invest outside of the US; States wouldn't offer reduced property tax rates and other incentives to attract business to them; and LLC's and other paper corporations wouldn't exist to 'hide' the transfer of taxable dollars. If we had a true capitalist society, businesses would be taxed on a similar playing field as the citizens of it's nation - ie not very many damn tax breaks.

Edited December 11, 2008 by rebeccajo

[one...two...tree 2,762]

The market rallied Monday with the weekend news of Obama's spending plans. The Dow Jones Industrial Average finished nearly 300 points up at the market's close, as investors hoped the stimulus package would put people to work and add to consumers' coffers.

Really? The markets tanked the next day...Go figger?

The "New Deal" is nothing more than big government attempting to do what Corporations and small business do in a capitalist society if given incentive to do so.

The jobs created by this "New Deal" are low paying, temporary in most cases, and mostly unskilled. They do nothing to improve our Global competitiveness in the short term, or in any term, period.

It's never a good thing when millions of people are beholden to the government, and the Dem's for their livelihood.

Sure infrastructure is necessary, but if it wasn't budgeted last year, there's reason to believe that it isn't needed this year.

Already stories are surfacing about Golf Course improvements, Tennis Courts, Bike Paths, and other projects that will benefit from a "Jobs" program....

Clearly the best approach is to do tax cuts, particularly reducing the Capital Gains tax to zero. Watch the Dow soar after that!

Keynesian economics have proven to be the better choice over Laissez-faire economics.

You're buying into the same 'ol, same 'ol Right Wing economic conundrums without realizing that the last 8 years have debunked them.