So what about the nitty gritty of Obama's American Jobs Act? Is it any good? At a policy level, it rings in at about $450 billion, much bigger than most people were expecting. Here's how it breaks down:
- $250 billion in tax breaks. Most of this is a payroll tax cut, but the plan also includes 100% expensing of business investment, tax credits for hiring unemployed workers, and a few other things.
- $100 billion in infrastructure spending. About half of this is for new projects, and the other half goes to an infrastructure bank, a program to fix up vacant and foreclosed homes and businesses, and a program to fix schools.
- $100 billion in other stuff, including extension of unemployment benefits, direct state assistance to hire cops and firefighters, a mortgage refinancing program, and a few other smaller items.
The White House fact sheet is here. So would it work? Macroeconomic Advisors, a private forecasting firm, estimates that it would boost GDP by 1.3% in 2012 and raise employment by 1.3 million. This is roughly equivalent to the CBO's low-end estimates of the original stimulus package in 2010, and the CBO has estimated that 1.3 million new workers translates to a decrease in unemployment of 0.7%.
Moody's is a little more optimistic: "The plan would add 2 percentage points to GDP growth next year, add 1.9 million jobs, and cut the unemployment rate by a percentage point.”
So that's probably the rough consensus. The plan is bigger than expected, the president's appeal was stronger than expected, the details of the plan have been generally well received, and if passed, it will raise GDP by 1-2 points and reduce unemployment by about one point or so.
So why did it take me so long to write a post about the actual policy impact of the AJA? Partly because I was waiting for the private forecasters to weigh in on its effect. But to put my cards fully on the table, there's also this: much more than usual — which is already a high bar — chattering about the policy impact of Obama's plan simply feels like a charade. I can't remember the last time that the actual merits of a policy proposal mattered so little. The details of Obama's plan will simply have no impact at all on whether it's passed. Among Republicans, reaction to Obama's proposal will be 100% guided by political considerations.
I don't think anyone really disputes this. And maybe I'll buck up and get all wonkish about this stuff after I recover this weekend. I usually do. But the truth remains that the policy impact of Obama's plan is purely a sideshow. Arguments on that level are all sound and fury, signifying nothing. Republicans just flatly don't care.