Will the American Jobs Act Go Anywhere?

After all the dust has settled from the speech, a huge question remains.  Will this go anywhere?  As I wrote in my last post, I think the speech did enough to put pressure on both sides.  This increases the likelihood that something gets done, but is it enough?  Maybe the answer is, not so fast.

Nothing in D.C. is ever what it seems.  For most of the off-season Washington Redskins fans thought John Beck was going to be the starting quarterback. Instead Rex Grossman will be under center week 1. Football references aside, things in the nation’s capital tend to change quickly.

During the speech, several items like corporate taxes and entitlement reforms brought republicans to their feet.  In the immediate aftermath they admitted that there was a lot to work with.  No one wants to seem like they are against creating jobs, so the popular thing to do was say let’s get to work.

The devil will be in the details though. The president promised that everything would be paid for, but failed to deliver the details.  He promised in the coming week that the details would be revealed.  Those details will determine how much support republicans give him for paying for this.

He talked about improving on the corporate tax rate by closing loopholes.  What loopholes will be closed and how will that lower the highest corporate tax rate in the world?  He mentioned entitlement reform, which will upset his base, and in theory draw support from republicans.  However, we need to know what that reform will look like.  Is it just making cuts, or eliminating waste?

When talking about rebuilding our infrastructure, the key is shovel ready projects.  The last stimulus promised similar construction projects, but found a lack of shovel ready projects.  For this to work, there needs to be a plan at improving the number of shovel ready projects.  The other issue is dealing with foreclosures. While it is great to talk about helping struggling homeowners refinance and capitalize on low rates.  We need to know how we get this done.  What is the plan to help those whose credit scores are too low?  What is the plan for those who are unemployed or underemployed?

The point of all this is that the details still are coming out, and depending on what these details say will determine if this goodwill continues.  I for one, am worried about these details.  I am not sure that both sides are going to hear what they want.  Once all the goodwill is gone and they get to work, we could be setting ourselves up for another nasty stalemate.  No one wants to be seen as stopping job growth, but they also don’t want to create jobs at any cost.


Were the NFL Lockout Negotiations a Guide for Debt Ceiling Talks?

Alright, so I know the NFL lockout lasted for months and we now have a short window for a debt ceiling deal.  However, there are some lessons that can be learned.  The main lesson is to keep the focus on what is important.  The owners and players realized that the most important thing was to not miss any games.  They realized that missing any games would put them at odds with their fans who make them the billion dollar industry that they are.  They also realized that everyone cannot be happy with every aspect of a deal.  There has to be give and take from both sides.  They focused on what they could agree on as the framework of the deal and built the tougher issues around that.  This gave them a basic structure for what an agreement should look like.

It took a few months, but now they have a deal that brings peace for 10 years.  Neither side is completely happy with every aspect, but it works because each side both won and loss in the deal.  They met their main objective as well. No regular season game is going to be missed, and while there will be some backlash from fans angry about the lockout.  Football is back and it won’t take much to win fans back.

Transition that to these debt ceiling talks.  Even in the condensed time frame they have left to make a deal the premise still works.  Both sides can agree that the ceiling needs to be raised, to protect our credit rating and financial markets. That is the most important piece of these discussions and should always be at the forefront.  Even though they could just raise the ceiling without tying it to anything else, that is they choice they made so let’s run with it.  Both sides also agree that there does need to be spending cuts on some level.  We know have two things we agree on that like the NFL, should become the frame-work for any deal.

Now that the agreed upon points are the basic structure of the deal, that leaves some room to negotiate on the disagreements to work them into the deal.  What both sides have to remember here is that no one is going to be completely happy with any deal that is struck, which is why there has to be give and take from both sides.  Even with the tough points find places for agreement. Instead of going after both tax increases and closing loopholes, why not settle in the middle and agree to close tax loopholes.  Instead of severe cuts to entitlement programs, why not meet in the middle and agree to eliminate the waste that does exist in them?  Seems me those are the two big holdup in all of this.  Everything else can be left out to deal with later and now we have a deal that everyone can support (except the tea party folks who can’t see why we should raise it at all).

Like the NFL, everyone will not like every aspect of this deal, but the main objective would be solved. Our credit rating would be saved, the financial markets would not decline again, and people could get back to focusing on creating jobs ad getting our country back to work.  Also like the NFL, the fans or taxpayers in this case, will have some backlash because they won’t like every aspect.  But, they would be able to appreciate that the larger goal was met, and that there was give and take on both sides.  Just like football is back, our nation can continue to go forward.