Our View: Job creation will require compromise from both political parties.

Just 41 percent of college graduates that applied for jobs this year received an offer, according to the National Association of Colleges and Employers. And under half of people age 16 to 24 were employed in July and August, according to the Bureau of Labor Statistics. It’s hard for anyone to get, and keep, a job in this economy, and recent graduates face even bigger challenges by competing with those with greater experience.

President Barack Obama is set to announce his job creation plan at 7 p.m. Thursday. Ahead of this speech Republican nominees — most notably Jon Huntsman and Mitt Romney ­— have announced plans of their own. We expect much of the dialogue in the coming days to consist of lofty rhetoric and promises we’ve heard before, but with the unemployment rate settled at 9.1 percent and the threat of further instability looming, it’s important for everyone to focus on the specific points of each plan. And despite the stubborn grandstanding from both sides, nothing productive will ever come from partisanship and ultimatums. If Republicans and Democrats are serious about creating jobs, they’ll have to be willing to compromise on points from multiple plans.

Points to keep

Romney and Huntsman

• Want to lower the corporate tax rate from 35 percent to 25 percent. America has the second highest corporate tax rate in the world, but most corporations, hiding behind loopholes, don’t pay that. If they are really dedicated to cutting the rate, then they must support the elimination of gratuitous loopholes and exemptions.

• Suggest some tax reforms — such as cutting the Alternative Minimum Tax, which penalizes middle-class families by not adjusting to inflation — that could get more money to consumers.

• Focus on the importance of developing trade agreements. The majority of last quarter’s growth came from foreign markets, according to The Los Angeles Times, so policies that support and deregulate international trade seem to be a wise long-term investment. But these agreements must be balanced with measures that bring business back from overseas, such as a reduction of the taxes companies must pay on income brought in from overseas markets (these high taxes encourage companies to move production overseas).

• Huntsman proposes a simplified tax structure, which would eliminate the current system of deductions (and with it, the maze of loopholes that leaves the tax system hemorrhaging revenue) and institute a basic tier system of lower tax rates, that deserves further exploration. But we worry that it may not properly protect the poorest of the poor.

• Huntsman insists that we create a level playing field for alternative fuels to develop and compete, reducing our reliance on foreign oil. This is good for both the economy and the environment.

Obama

• Wants to create more construction work through infrastructure investments and send aid to state and local governments for school improvements.

• Will couple this spending with tax cuts, such as an extension of the payroll tax break that keeps money in citizens’ paychecks, an incentive to businesses that hire unemployed individuals and a tax break on corporations’ new equipment.

• Will encourage an extension to his expiring jobless benefits.

• Will suggest deficit-reducing measures that will help pay for his plan’s estimated $300 billion price tag. It’s good that he’s trying to work with Republicans like this, but he’ll probably have to accept more tax cuts and some cuts to social programs if he wants to move forward.

Points to ignore

Romney and Huntsman

• Want to reduce or eliminate a host of taxes on businesses. Democrats are right to point out that flagging consumer demand is a bigger threat to profit, and thus a higher priority, than taxes.

• Push for greater use of our natural fuel resources. Yes, we want to get away from a dependence on foreign oil, but we must use caution — Huntsman’s plan decries the Environmental Protection Agency and hints that we should steam roll over environmental concerns for economic growth.

• Call for a cut to the capital gains tax (though they differ on the specifics), but this measure would mostly affect more wealthy Americans and so wouldn’t help the jobless or lead to new jobs.

• Huntsman calls for the privatization of Fannie Mae and Freddie Mac. Allowing these institutions to go under would spark a financial meltdown, so the government will continue to bail them out of crisis after crisis, private entity or not. At least now the House can strictly limit the risks they can take.

Obama

• Will be tempered by a sense of “last-ditch effort.” With his approval ratings plummeting and partisan tensions high, a lot is riding on his speech. It’s hard to say more until the specifics are unveiled, but we’d rather him go big and be willing to compromise than go small and get nothing done.

Many of the other suggestions may be beneficial in their own right, but won’t have any direct impact on job creation. Much of the time these plans read more like campaign speeches than specific steps for stimulating growth. Republicans are simply following the old rhetoric that business-friendly policies are a magical cure for our economic ills, ignoring the fact that most companies have seen record profits in the last few months, but as the stagnant job rate illustrates, are simply not willing to invest in hiring. Obama has it right with his new equipment tax break; we need similar suggestions that directly combat our current problem by rewarding growth.

Only by overcoming the parties’ rhetoric and seeing the strong points of each plan will anyone in Washington be able to effect the unemployment problem and ensure that we won’t be graduating into poverty.

Comments

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Aphrodisiac 8 months, 2 weeks ago

Thanks for presenting this important information in a condensed, understandable format. It's a lot easier to choose between policies when partisan b.s. is out of the way and we can simply look at the options.

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