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- iHaveNet.com: Economy
by Liz Wolgemuth
When it comes to jobs, the
Here are five things to know about the newest jobs bill:
The House already passed a version: Late last month, the House just barely passed a $90 billion package that was stripped of
The House bill would extend the stimulus program that eliminated fees on
The
For one thing, Senate Democrats are interested in restoring the $24 billion in
The bill increases taxes on investment fund managers:
One element in the bills, meant to offset their cost, is a tax on private equity and hedge fund managers, who generally pay just 15 percent tax on the portion of the fund's profits that they receive as income. That income has generally been categorized as capital gains. The new law would tax much of that partnership or fund income as "ordinary income" at a traditional rate of 35 percent. Opponents of the provision argue that capital gains should never be treated the same as traditional income because fund managers face such a substantial downside risk, while proponents of the new legislation tend to refer to the existing carried interest law as a "tax loophole." The
It's the old deficit vs. jobs argument:
The biggest issue for Washington lawmakers at the moment is a spiraling national debt paired with a very lackluster job market. Many groups, particularly labor unions and left-leaning economists, argue that the money spent on jobs shouldn't be weighed against the deficit. Robert Reich, former labor secretary under President Clinton, still holds that the government needs to be stoking the economy until consumers have fully returned. "Without consumers opening their wallets, and without government making up the difference, we're careening toward a double-dip recession," Reich recently opined. "The long-term deficit (i.e.
Republicans are feeling more abstemious. Senate Minority leader Mitch McConnell argued on the
Jobs bills work -- sometimes:
The phrase "jobs bill" has been slapped on several pieces of legislation during this recession: the American Recovery and Reinvestment Act of 2009; the Hiring Incentives to Restore Employment Act; the Worker, Homeownership and Business Assistance Act. Many economists would defend the efficacy of some of these efforts -- particularly the stimulus and any and all extensions of unemployment benefits -- as having preserved or created jobs in the face of a scorching recession. When the government supports the unemployed with insurance extensions, the unemployed immediately spend their benefit dollars and prop up consumer spending, which helps preserve or add jobs. To that end, reducing unemployment benefit payments -- both a stimulus and a short-term program -- seems particularly unwise, says Larry Mishel, president of the
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5 Things to Know About the Newest Jobs Bill