The HIRE Act is Here

With the coming eclipse of the behemoth legislative process that was health care reform, Congress was able to focus on the nation’s top public and domestic security concern: job creation.

Today (March 18th, 2010) at 11:27 am President Obama signed a much-anticipated jobs bill into law, hoping its measures will reduce the unemployment rate that has so plagued American confidence and livelihoods since the 2008 economic crisis. The President highlights the bill as an achievement for both business owners and those seeking jobs. Entitled The HIRE Act, the bill’s four core components include:

Tax breaks to reduce expenses for businesses: “payroll taxes will be forgiven for businesses that hire someone who has been unemployed for at least two months.”

• Business incentives to promote growth and thus increased employment opportunities: the law allows “small businesses to write off investments they make in equipment this year.”

• Stimulating new job sectors: “It will reform municipal bonds to expand investment in schools and clean energy.”

• Public works and infrastructure programs: “it will continue roadway infrastructure investment into the spring and summer, when, the president said, construction jobs pick up.”

Source: CBS Article

Originally a $150 billion proposal, the package was reduced to $17.5 billion to secure enough votes for its passage in today’s budget-wary public and political environment. Democrats say it is the first of a series of bills to promote job growth.

“A consensus is forming that, partly because of the necessary -- and often unpopular -- measures we took over the past year, our economy is now growing again and we may soon be adding jobs instead of losing them. The jobs bill I'm signing today is intended to help accelerate that process,” says Obama.

In his introduction of the bill Obama states that, by economists’ understanding of the stages of economic recovery, the United States is slowly moving forward. This is measured by such factors as whether an economy is growing, whether businesses have begun to hire temporary workers or increase employee hours, and whether businesses have begun to hire full-time employees again. However, he admits that for the hard-hit middle class on the local level, economic good times seem a long way off.

“I'm signing it mindful that, as I've said before, the solution to our economic problems will not come from government alone…But what we can do is promote a strong, dynamic private sector -- the true engine of job creation in our economy.”

Obama lauded all the members of Congress for passing the bill and stated that he was thankful that “over a dozen Republicans agreed that the need for this jobs bill was urgent, and that they were willing to break out of the partisan morass to help us take this forward step for the American people.” Emphasizing that economic recovery is “about all Americans” regardless of party and ideology, the President said he hoped this bill was a sign of more cooperation to come.

While optimistic about the future, the President did issue a disclaimer. “Now, make no mistake: While this jobs bill is absolutely necessary, it's by no means enough. There's a lot more that we're going to need to do,” he said, suggesting that helping small businesses to get loans and offering incentives to make buildings more energy efficient are among other needed changes.

There are, of course, those skeptical of the act’s potential. Some estimates say the tax break will create approximately 250,000 jobs by the end of 2010, but critics urge this is a trivial number given the 8.4 million jobs that have been lost in the recession.

I personally fear that, though $17.5 billion sounds like a significant amount of money, the bill falls far short of the tipping-point necessary to turn the job market around. Sadly, if this is the case, these billions will have been spent for little gain. I understand the political inertia around passing fiscally large, comprehensive bills—especially now when fear of big-government and national spending is so rampant—but I believe oftentimes this restraint comes at the cost of legislation being effective (and then what’s the point?).

Stay tuned for more information on the effects of this legislation as it becomes available, and for more expert opinions on how--and whether--government can create measures for a better job market.

All numerical information in this post is from CBS (http://www.cbsnews.com/8301-503544_162-20000700-503544.html).