The White House outlined $467 billion in savings to pay for the American Jobs Act through a series of tax policy changes, Office of Management and Budget Chair Jack Lew announced Monday at the White House daily briefing. While the president’s bill has a $447 billion price tag, Lew explained that the extra $20 billion is designed as a cushion to ensure the bill is “fully paid for” as the president has repeatedly promised.
Among the offsets suggested by Lew:
– New limits on deductions for income over $250,000. This would raise $400b over ten years.
– New formulas for taxing the income of hedge fund managers’ could raise $18 billion.
– Oil and gas measures, Lew said, would raise $40 billion.
– Limiting tax deductions for corporate jets would raise $3 billion.
The president hopes the special congressional supercommittee already searching for $1.5 trillion in deficit reduction will “overachieve” and consider these proposals or find different means of offsetting the nearly half a trillion he needs to pay for a job creation bill.
“The president is asking the Congress to make choices because…we simply don’t have the capacity to pay for everything — to pay for special treatment in the tax code for oil and gas companies which are also making record profits this year, and jobs for up to 280,000 teachers. We don’t have enough to pay for a special little provision in the tax code for corporate jet owners that doesn’t apply to commercial jet owners and also pay for the kind of repairs that schools across the country need,” White House Press Secretary Jay Carney told reporters today.
The president is expected to offer the “pay-fors” as part of a larger deficit reduction package that he will present to the supercommittee next Monday. If the supercommittee fails to come up with the cash, the president’s jobs bill contains triggers that would initiate the tax increases.
“This is a stand-alone bill. It has the investments in growth and jobs, and it has some provisions that pay for it,” Lew said. ”By raising the target of the joint committee, what we’re saying is Congress should pass the jobs bill now, with the pay-fors, and when the joint committee reaches its decisions later in the fall, it can then either put in new offsets to pay for it and that would trigger the pay-fors that are in the bill off, or it can do the original target of 1.5 (trillion dollars) and then the pay-fors that are in the jobs bill will stand. That’s the relationship between the joint committee and the bill. The bill is paid for, and whichever path the joint committee takes, the jobs piece is paid for.”
But why does the White House want Congress to vote on the jobs bill with the pay-fors and then give the supercommittee the option to review that package? “Well, frankly, the urgency is to act as soon as possible on the jobs and growth package,” Lew said.
“We wanted to pull out the provisions that we thought could move most quickly to get action taken so that, as the president has said, Congress can take up the bill and pass it. As far as how we reach the deficit reduction goals, which is what the mandate of the joint committee is, there’s a little bit more time if they want to go back do some fine tuning. So if you think of it as a kind of trigger mechanism, these are in place unless the joint committee acts to trigger them off. And it really is a way to try to get action started sooner,” he said.