Copy Of Obama Economic Stimulus Plan

Social Entrepreneurs at Professional Diversity Network Announce Free Resume ...

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Economists show support for Obama job-growth plan — Clearing ...

WASHINGTON (AP) — A tentative thumbs-up.

That was the assessment Thursday night from economists, who offered mainly positive reviews of President Barack Obama’s $447 billion plan to stimulate job creation.

Some predicted it would put hundreds of thousands of people back to work next year, mainly because a Social Security tax cut for workers would be deepened and extended to small businesses.

“Payroll tax cuts are very powerful,” said Allen Sinai, chief economist of Decision Economics. “They provide a boost to direct income and, in turn, spending, which is important to growth.”

Mark Zandi, chief economist at Moody’s Analytics, estimated that the president’s plan would boost economic growth by 2 percentage points, add 2 million jobs and reduce unemployment by a full percentage point next year compared with existing law.

The heart of Obama’s plan is an expansion of the Social Security tax cut, which took effect this year and is scheduled to expire by year’s end. The tax cut now applies only to workers; it reduces their Social Security tax from 6.2 percent to 4.2 percent. Employers still pay the 6.2 percent rate.

Obama would renew the tax cut for a year and deepen it: He would drop workers’ Social Security tax to 3.1 percent.

Under his bigger tax cut, an extra $1,550 would go to taxpayers earning $50,000 a year. The Social Security tax is imposed on the first $106,800 of taxable income. That means the maximum savings would be about $3,300 for an individual and $6,600 for a couple.

Obama would also halve Social Security taxes for businesses whose payrolls are $5 million or less. The White House says that would include 98 percent of U.S. businesses.

Zandi calls this a “creative” way to help small companies, which have struggled more than larger ones to recover from the Great Recession of 2007-2009. During recoveries, small businesses normally drive job creation.

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