White House Outlines $467 Billion In Savings To Pay For Jobs Act
WASHINGTON -- The Obama administration announced on Monday a series of tax policy changes that officials say will pay for the costs of the president's job creation plan.
The provisions, announced by Office of Management and Budget Chair Jack Lew, would raise a projected $467 billion over the course of 10 years. The American Jobs Act, as outlined by the president last week, will cost an estimated $447 billion.
The president is set to offer those pay-fors as part of a larger package of debt and deficit reduction measures that he will present to the congressional committee tasked with finding $1.5 trillion in savings. Whether the committee incorporates those measures is up to them, Lew said. If they choose not to, however, the administration said it would welcome Congress as a whole taking up the proposal.
The provisions the White House is offering as an offset are largely rehashes of tax policy changes that the president has pushed before. The primary piece would be to limit itemized deductions for individuals making over $200,000-a-year and families making over $250,000 -- which Lew said would raise $400 billion over 10 years. Another pay-for would be to treat carried interest as ordinary income rather than capital gains, which Lew said would raise $18 billion. The White House is also calling for the end of tax subsidies for certain oil and gas companies, which the administration believes would raise $40 billion, and the axing of a tax break for corporate jet owners, which it believes could save $3 billion.
"The kinds of provisions we are talking about changing we don't believe will cause a reduction of any kind of economic activity or job loss," said Lew.
"In terms of timing, these provisions don't take effect until January 2013," he added, emphasizing the long-term nature of the off sets. "It is very consistent in paying for an immediate jobs and growth package."
By offering specific ways to pay for the American Jobs Act, the White House is fulfilling an early promise from when he began the latest pivot to job-creation: mainly that anything he proposed wouldn't increase the deficit. But in coming out with a plan of his own (rather than, say, asking the super committee to find the money for the bill), the administration risks handing the GOP a cudgel of its own. The tax provisions that Lew outlined all have been offered, to some degree, in the past, only to be summarily castigated as hikes and shelved by Democrats and this president.
The administration also may be making the super-committee's job a touch harder. If those specific tax policy changes are used to pay for the jobs act, that means that committee members can't double dip -- i.e. use the same measures to achieve their $1.5 trillion in savings. Lew, for his part, downplayed that potential issue, noting that the president will outline a large deficit and debt reduction package that "will achieve beyond the targets beyond what the joint committee has, fully pay for the jobs package and stabilize the deficit and debt in the ten year window."