In January, Democrats unveiled a short-term economic growth plan to help jump start the economy now. And in March, Democrats offered a budget that created 1 million jobs, kept our promises to veterans, and invested in education and health care without creating the harmful budget deficits in the GOP budget plan. Instead of postponing critical decisions, Democrats want to act now to create jobs. Our plan includes the following economic proposals, which independent economists have said have the most bang for the buck in creating jobs:
Tax cuts of $300 per person to encourage spending and create jobs. The Democratic plan provides a $300 tax cut for most of the more than 150 million workers in America, and $600 per working couple. Unlike the President’s plan which targets tax breaks for the wealthy few, this proposal would put spending money in the pockets of average Americans – boosting consumer demand and the business investment to meet it. In addition to helping financially-pressed Americans, this tax cut will put money into the economy, and thus create jobs, far more quickly than the tax break for tax dividends in the President’s plan. Economists have estimated that each dollar of broad-based tax cuts leads to $1.19 in economic growth.
Small business tax cuts to create jobs. The Democratic plan includes $32 billion in tax relief for small businesses, the engine of our economy, and other business investments. The measure provides immediate tax relief for small businesses to generate investment and jobs in 2003; it doubles the amount small businesses can write off their taxes for new investments made in 2003 from $25,000 to $50,000. In addition, it provides immediate tax relief for all businesses to invest in new plant and equipment in 2003. Specifically, it speeds up bonus depreciation provisions, so that firms can write off 50 percent for investments in 2003, encouraging new investments now when the economy needs it most.
Money in the hands of financially-pressed families of unemployed workers to create jobs. The Democratic plan pumps money into the economy, by extending benefits for the millions of unemployed workers who cannot get jobs because of the sagging economy. The Democratic bill would continue the extended unemployment benefits program for an additional six months, increase the length of unemployment benefits from 13 to 26 weeks, provide more coverage for roughly one million workers who have already exhausted their federal help but still have not found a job. Economists have estimated that each $1.00 of unemployment benefits leads to $1.73 in economic
Targeted assistance for States and localities. Fiscal crises in the states are forcing tax increases and cuts in critical programs, undermining the economy’s recovery. Our plan provides states with $31 billion this year to avoid these cuts and to address critical needs in areas including health care, homeland security, and transportation infrastructure. The package provides an additional $6 billion in one-time assistance to help those hurt most by unemployment and a stagnant economy. Economists have estimated that every dollar in state and local assistance results in $1.24 in economic growth.
Transportation and infrastructure spending to create jobs. Democrats propose to add $5 billion to highway funding this year, using a proven strategy that creates 47,500 jobs for every dollar spent. This will create 237,500 good-paying jobs, and $30 billion in additional economic activity (such as spending by construction workers and the suppliers of the materials for building the highways). In contrast, the President’s budget cuts highway funds for FY 2004 by 7%, even though better highways mean good-paying jobs.