Local officials wary of impact of HIRE Act signed by Obama
President Obama’s signing of a $38 billion jobs bill Thursday to spur hiring and help small business owners didn’t excite local officials.
“I don’t think it’s going to play a very big role in business hiring decisions at the local level,” said Diane Schwenke, president and CEO of the Grand Junction Chamber of Commerce.
Duncan McArthur, government affairs director for the Grand Junction Area Realtors Association and the Housing and Building Association of Northwestern Colorado, called the HIRE Act a step in the right direction.
But, he added, “I’m not so sure how effective it will be. With business, it’s not going to drive any jobs away. The question is how many it will create.”
The legislation, with $17.5 billion in tax breaks and $20 billion for highway and transit programs, is expected to create 250,000 jobs by year’s end. Bear in mind, 8.2 million jobs have been lost since the recession began in December 2007.
Not only would businesses get a $1,000 credit for each new worker remaining on the job for a full year, but those hiring anyone who has been out of work for at least 60 days would be exempt from paying the 6.2 percent Social Security tax on that employee through December. The federal government would pick up the tab to the Social Security trust fund for the shortfall.
The bill includes a tax break extension for small businesses that buy new equipment, and it expands an initiative to help state and local government pay for transportation and infrastructure costs.
The total package is paid for in part by cracking down on offshore tax havens over the next decade, but would add $13 billion to the national debt over the next three years, according to the Associated Press.
Local officials said tax credits included in the law aren’t necessarily worth the paperwork.
“Any new employee is going to cost way more than $1,000 to put on your payroll,” Schwenke said, unless you’re in the fast-food business or an industry with a high turnover rate.
As such, she didn’t think it would help the long-term unemployment rate.
“I think that sentiment is probably amplified in our sector,” said David Ludlam, executive director of the West Slope Oil and Gas Association. “When you hire a position among any of the major service operators, those kind of short-term, one-time incentives don’t really get to the heart” of what’s affecting the natural gas industry, “despite the good intentions of Congress.”
“I don’t think it’s going to make a bit of difference,” said Rich Keller, a board member of the Western Colorado Contractors Association. “Unless someone has a job for someone to do, they’re not going to hire. The construction industry is in the straits that it’s in for a lack of money, either by banks or local governments or whatever.”