The Senate “jobs bill” passed on Wednesday contains nearly $60 billion in (obviously-jobs-related) extended unemployment benefits. (Here is the CBO cost estimate.) But it also includes $34 billion in extended tax cuts, none of which are brand new (they’re “expiring” provisions, after all) nor uniquely designed to get us out of this particular recession. These are expiring tax provisions that regularly expire and regularly get extended. (Here is the JCT revenue estimate where you can see line by line details on the revenue provisions.)
So the extension of the expiring tax provisions is something that would occur, repeatedly, even without the vehicle of a “jobs bill.” There really is hardly ever a tax cut that is truly “temporary” in practice, no matter how it is written into law. What the label of “jobs bill” allows is the exemption of these (effectively permanent–in good times and in bad) tax cuts from PAYGO rules, which would otherwise require that the cost of the tax cuts be offset. The CBO estimate shows (on page 2) that out of the package’s around $100 billion in cost over ten years, $95 billion is considered PAYGO-exempt because of the “emergency” designation.
It makes me wonder why politicians don’t try to label any policy they’re trying to pass lately, especially any policy they don’t want to have to pay for, as a “jobs bill.” The title of this tax extenders bill that happens to include the extension of unemployment benefits is the “American Workers, State, and Business Relief Act of 2010.” As the Administration and Congress struggle to reach agreement on the health reform bill, particularly over the policies designed to keep it (at least slightly) deficit-reducing, I wonder if it won’t be long before we hear the argument that health reform–and the expansion of health entitlements and the deficit–is needed to create jobs even more than it’s needed to control costs. When will the health reform bill get relabeled as a “jobs bill”?