What’s In The President’s Jobs Plan For DC And Its Residents?

Even those of you who didn’t watch President Obama’s jobs speech to Congress probably know, in general terms, what’s in it.

Probably have also read and/or heard reactions from various quarters. A “strong blueprint.” Same old failed stimulus stuff. And everything in between.

I’ll spare you my own off-the-top-of-the-head assessment. Will instead give you, courtesy of the White House, some sense of what the American Jobs Act could mean for the District of Columbia and its residents.*

Payroll Tax Cuts

The President, as expected, wants to extend the employee payroll tax cut that Congress passed last December. But he wants to expand it so that workers would pay only half as much as they ordinarily would.

The White House says that a “typical” District household, i.e., one with an annual income of around $53,000, would have an additional $1,640 or so in take-home pay.

The President also wants to halve the employer payroll tax for the first $5 million of a firm’s wages. According to the White House, 20,000 firms in the District would see their payroll taxes cut to 3.1% next year.

There’d also be a full payroll tax holiday for firms that increase their payrolls by new hires, raises or both. No impact estimate for this.

Construction Projects

The President’s plan has five discrete types of investments in infrastructure upgrades and other modernization projects.

Highways and public transit systems, high-speed wireless services, public schools and community colleges would each get a pot of money. A separate pot would be available for projects to rehabilitate and refurbish vacant and foreclosed homes and businesses.

For highways and transit systems, the District could get at least $387.3 million, for public school modernization another $84.7 million, for community college facilities $2.5 million and for rehab/refurbishing about $20 million, plus whatever it might get through competitive grants.

Funding in the first two categories could support an estimated 6,100 jobs, the White House says. No jobs estimates for the other two.

Public Sector Jobs

The Presidents wants targeted funds to go to state and local governments. About 85% would have to be used to save teacher jobs and/or to reverse the results of layoffs. The remainder would be earmarked for hiring and retaining public safety officers and firefighters.

The District would get a total of $45.1 million. The White House says this would support as many as 500 jobs.

Other Help for the Unemployed

The President’s plan confirms his support for another extension of the federal programs that provide unemployment insurance benefits to jobless workers when their regular state benefits expire.

The White House says the extension would preserve benefits for 5,500 District residents during the first six weeks alone. The number could triple by the end of next year if the situation here proves typical of what it projects for the country as a whole.

The President is also proposing “reforms” in the UI system. These will require a closer look. Generally speaking, most of them would allow states more flexibility in how they use UI benefits.

States could, for example, continue paying UI benefits to long-term unemployed workers who take temporary jobs or pursue work-based training. This is the option the President highlighted in his speech, but the legislation will apparently provide for others.

The White House says the reforms “could help put the 16,000 long-term unemployed workers in the District of Columbia back to work.” Or not, since the impact would depend on many factors, e.g., what, if anything, the District decided to do differently, how employers responded, labor market demands.

The President also proposes a new fund to provide low-income youth and adults with job opportunities and on-the-job-training. He seems to envision something like the subsidized jobs programs that were supported by the now-expired TANF Emergency Contingency Fund.

The White House says the new program could place 400 adults and 1,400 youth in jobs in D.C. I assume the District would make sure they lived in D.C. too.

The Pay-For

The President has said he’ll produce a plan showing how the cost of the whole package could be fully offset so that the Super Committee could still meet its deficit reduction target.

His speech refers to eliminating tax breaks for “the wealthiest Americans and biggest corporations.” Also to unspecified “modest adjustments” in Medicare and Medicaid.

Judging from what the White House has floated before, these “adjustments” could be bad news for the District and its low-income residents. (See my post on what the White House previously proposed for Medicaid matching rates.)

But, of course, the President proposes. Congress disposes. And what, if anything, it passes is likely to look quite different.

Caveats notwithstanding, not too different I hope.

* What follows is based on a fact sheet in a state-by-state set the White House circulated via e-mail and has now posted here.

NOTE: This version of the post reflects a correction in one figure and the addition of a missing item in the construction section. I have also added a link to the state fact sheets, which were not online when I wrote this.

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3 Responses to What’s In The President’s Jobs Plan For DC And Its Residents?

  1. [...] After I finished as writing this, I discovered a more detailed preliminary assessment on what the AJA might mean for D.C. by Kathryn Baer, posted on her Poverty and Policy [...]

  2. [...] Via Kathryn Baer, on Friday the White House posted fact sheets on what the American Jobs Act would mean for every state. The District's goodies include: [...]

  3. [...] After I finished as writing this, I discovered a more detailed preliminary assessment on what the AJA might mean for D.C. by Kathryn Baer, posted on her Poverty and Policy blog. Share this:EmailPrintFacebookTwitterLike [...]

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