Here's a quick summary of key elements of President Obama's American Jobs Act based on documents from the White House and Reuters.
Overall, the bill would deliver roughly $450 billion in job creation measures, a majority of which would come in the form of tax breaks. Because the bill is mostly focused on 2012, it is similar in scale to the 2009 recovery act.
The employee payroll tax holiday would expand the current payroll tax holiday, cutting the 6.2% payroll tax to 3.1%. The White House says this would mean a temporary $1,500 tax break for average families. It would pump $175 billion into the economy, a 50% increase over the 2011 payroll tax holiday.
The remaining $70 billion in tax cuts would be targeted to businesses. $65 billion would go to a payroll tax holiday for small businesses, cutting the payroll tax by half on the first $5 million in payroll. In addition, any net increase in payroll, up a total of $50 million, would receive a complete payroll tax holiday. $5 billion would also be used to allow businesses to accelerate depreciation of assets, a program designed to encourage businesses to accelerate equipment purchases.
One important point is that while the cost of the payroll tax holiday would be borne by the general fund. The Social Security trust fund would continue to increase as if there had never been a payroll tax holiday, so from an accounting perspective, it would have no impact on Social Security.
The remaining provisions in the proposal would consist of spending. $85 billion would be targeted to state and local governments, the bulk of which would be targeted to keeping teachers on the job and modernizing schools. Reuters breaks it down:
• $35 billion to keep teachers, firefighters and police officers in their jobs, of which $30 billion would go to schools and $5 billion to police and firefighters.
• $30 billion to modernize schools and community colleges.
• $15 billion to rehabilitate and refurbish vacant and foreclosed homes.
• $5 billion to help low-income youths and adult workers, supporting summer and year-round jobs for young people and support subsidized work for unemployed low-income workers
The package calls for another $50 billion in direct infrastructure investments and $10 billion to help establish an infrastructure bank to fund infrastructure projects, so between the $60 billion for infrastructure and $30 billion for modernizing schools, it would provide roughly $90 billion for construction-related projects.
The bill also provide $57 billion for extended unemployment benefits to assist the long-term unemployed during the economic recovery.
The White House, which opposes any additional short-term spending cuts, says the proposal would be paid for by long-term deficit reduction measures coming from the debt deal super committee.