President Bill Clinton Job-Creation Blueprint Fact Check


President Bill Clinton's Blueprint to Boost Jobs

5. Clinton said a million people across the country could be put to work retrofitting buildings to be more energy efficient, like the Empire State Buildings.

"That depends on how many buildings are retro-fitted and how quickly the jobs get done," economist Bronars said. "A million jobs for how long? Six months? A year? Again the retro-fitting should occur if it saves on energy costs, etc., not just because it puts people to work."

6. Another proposal is to allow utility companies to collect money saved from energy cost work and use it to pay their workers, citing a program in Arkansas called HEAL (Home Energy Assistance Loan).

"You get 7,000 jobs for every billion dollars in retrofitting," he wrote.

"Again, the big question is a job for how long?" Bronars said. "If it's a job for a year, that makes sense. President Clinton assumes the cost of retrofitting, which include labor, capital equipment, and materials, is $143,000 per job per year."

Rouse said putting more people to work on retrofitting buildings or larger projects could help build a state-of-the-art infrastructure that is needed for economic growth.

"With the fragile economy, it's not a bad time to put people to work and take advantage of low interest rates for public-sector borrowing," she said.

7. The former president's seventh proposal is to lower corporate tax rates to attract companies to the United States, "but reduce the loopholes that cause unfair disparities."

Rouse said Clinton supports lowering the tax rate but broadening the base. In theory, this would increase competitiveness because of the lower rate. But in a budget-neutral or lower-cost way by broadening the base.

"The issue here is which loopholes, tax credits or deductions will be eliminated?" she said. "The devil is in the details."

Swagel said boosting the U.S. economy and spurring job creation includes two parts that must be implemented at the same time.

First, cut taxes today to spur near-term demand. Swagel said he prefers cutting both taxes on labor and on investment. In other words, he prefers to cut the employer payroll tax and let firms write off their new investments immediately rather than over time.

Second, he suggests putting in place "a credible plan to address the fiscal imbalance over time."

8. The eighth proposal describes the need to encourage banks who are "jittery about the economy" to lend. He said that if the Small Business Administration had a 10-to-1 loan-to-capital ratio, rather then current 20-to-1 ratio, the government could guarantee $150 billion in loans and create more than a million jobs.

"This assertion is preposterous. Does anyone really think that there are a million jobs to be created if only there was another $150 billion of loans in the economy?" Swagel said. "Yes, many small businesses still report constrained access to lending compared to large corporations. But overall interest rates are very low.

"It is hard to imagine that is really the obstacle to creating one million jobs. And does anyone really believe that SBA has the ability to wisely lend out $150 billion in any near-term time frame? No way."

Economist Bronars said if the president is assuming 1 million jobs, for one year, he is also asserting that for each $150,000 loan a company gets for capital improvements, it will employ someone for a year. Bronars said that proposal includes many assumptions about how capital intensive an industry is and what the loan is for.

"Some capital expenditures could be used to automate production processes and would increase construction employment but could decrease the employment at a plant after the capital is in place," Bronars said. "This does not make it a bad loan."

Bronars said the idea of capital investment is to improve productive efficiency and increase profitability. "It may or may not cause job growth to occur at the rate president Clinton suggests," he said. "It seems reasonable but job creation should not be what banks or the SBA looks at when deciding whether or not to loan money to a business."

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