Obama caves to Congress on jobs credit

I hope this doesn’t become a pattern. I’ll give Obama the benefit of the doubt and hope his economic team is asking for something the Democratic Congresss doesn’t want to give, so this move is part of quid pro quo.

From the link:

Aides to President-elect Obama have agreed to drop an unpopular idea to provide a $3,000 tax credit for companies hiring new workers from the economic stimulus package, setting up a new round of lobbying for tax cuts that could replace it, lawmakers said Jan. 13.

“Every member has five ideas” for how to replace the jobs creation tax credit, Senate Finance Committee Chairman Max Baucus (D-Mont.) told reporters after a meeting with Obama aides. Baucus did not elaborate on possibilities for replacing the credit, but other Finance Committee members floated suggestions for further expansions of renewable energy tax credits and a tax credit of up to $4,000 to help middle-class households pay for college.

The tax elements of the package have been expected to cost about $300 billion over two years, and the total package is projected to be at least $775 billion.

Sen. Charles Schumer (D-N.Y.) told reporters he is pushing to convert to a tax credit the deduction of up to $4,000 that is currently allowed for higher education expenses under the tax code, to provide assistance to individuals earning too much to get help from Pell grants but too little to afford tuition. The provision would cost an estimated $3 billion to $4 billion per year, Schumer said.

Committee members rejected the jobs creation tax credit amid concerns that it would be impossible to implement fairly and may not be stimulative since it would merely treat the symptoms of the economic slowdown, rather than its cause.