President Obama is out this week with three proposals for stimulating—oops, forgot we weren't supposed to use that word—for creating jobs.
Two cheers for the president!
The first cheer is for the expansion of the research and development tax credit. While details are still to come, the president wants to increase the credit by 20 percent, and it appears he wants to make it permanent.
He argues it's a way to spur innovation, keeping good jobs here in the U.S. He's probably right. However, reports say he wants to pay for the extension—$100 billion if it's made permanent—by closing other business tax loopholes. We'll have to wait and see what that means.
The second cheer—and it's a big one—is one IPI can claim some credit for: accelerated depreciation to stimulate business investment. The proposal is similar to an IPI proposal from back in 2001, but even better. FedEx Chairman Fred Smith referred to it in a February Wall Street Journal op-ed. In addition, Verizon Chairman Ivan Seidenberg referred to the proposal in a recent speech for the Business Roundtable.
It's expensive: $200 billion—much less, actually, since businesses would eventually take the write-offs anyway—but it's a good pro-growth idea. It will encourage companies to make capital investments immediately. But the president should have included it in his earlier efforts to stimulate the economy. Had he done so, as many conservatives encouraged him to do, the economy might be rebounding.
More importantly, if immediate expensing is a good idea, why stop with 2011 as his plan calls for? Why not make it permanent?
Finally, the third leg of his "not a stimulus package" stimulus package is another $50 billion in infrastructure spending. Didn't we already do that? He won't get a cheer from us for that idea.
The president hopes his new efforts will have the effect of "increasing business certainty." The White House fails to explain that most of the business uncertainty out there is a direct result of the president's many previous stimulus packages, ObamaCare and financial reform, refusal to expand free trade, and the imposition of a massive new regulatory system on health care, employees, retirees, pensions and banking.
He's finally taking a couple of steps in the right direction, but he's already lost the race.