National jobs emergency

The jobless numbers to be announced Friday will probably bring grim news that will distress the nation, alarm official Washington, threaten incumbents of both parties and dramatize the need for major bipartisan action to create jobs.

While President Barack Obama and virtually every member of the House and Senate proclaim the primacy of jobs over all other issues, the nation barely witnesses a modest jobs bill while political and media elites escalate the national spectacle over healthcare politics and tactics.

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It is time to recognize that Americans face a national jobs emergency and time for both parties to seek a dramatic bipartisan jobs bill. 2010 should be the year of creating jobs, while 2011 should begin the hard choices of lowering deficits and debt.

While remaining stimulus money is spent in the coming months, the president and Congress can inject an economic booster shot through targeted but significant business tax cuts to dramatically incentivize the small businesses and high-growth companies that create the most jobs.

American jobs are created by risk-takers, not asset-shufflers. There should be significant rewards for small-business entrepreneurs, venture capitalists and all investors who take risks that grow businesses and create jobs.

Dramatic tax benefits should be enacted that begin immediately and expire by Sept. 30, 2010. These incentives should be very dramatic, and the time period for taking advantage of them should be very compressed to minimize the cost and maximize the benefit during the turnkey period when recession becomes growth but job creation lags.

For small businesses that create jobs and increase payrolls in the coming months, there should be a dramatic jobs tax credit worth at least $5,000 for new hires prior to Sept. 30.

The president and Congress can enact a full capital gains tax exemption, with a capital gains tax rate of zero, for new investors in small and fast-growth businesses prior to Sept. 30 for assets held at least two years.

I would propose including in the capital gains tax holiday new investments in newspapers, which make an extraordinary contribution to our democracy and are struggling to create financially viable synergies with new media and social networking.

Given the limitations for bipartisan deal-making during a national jobs emergency, there should be significant bipartisan support for short-term tax cuts tied directly to job creation that increases business payrolls.

One of the great impediments to creating new jobs is the inability of even strong, well-run and successful growth companies and small businesses to attract capital. Far too often banks refuse to lend, credit lines are cut and credit cards, which are essential to many small businesses, have had rates raised and credit lowered.

Short-term, dramatic, job-focused tax cuts would bring a substantial capital inflow from venture capitalists, private equity funds, Wall Street firms and individual investors willing to risk private capital in ventures creating growth and jobs.

These tax cuts would generate jobs in the short to medium term. With economic recovery and a short expiration date, more conventional financing sources such as banks would almost certainly loosen the spigots, fearing they would lose out on the most safe and profitable loans they decline to make today.

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Government spending is important and the stimulus spending, which clearly has had some positive impact, will increase in coming months.

What is urgently needed is “bridge money” to jumpstart the jobs engines of the economy through private capital flowing to firms that create the jobs.

As Americans will be reminded when the jobs numbers are released Friday, the nation faces a jobs emergency. While healthcare maneuvers proceed, both parties can enact a job-creating booster shot that the economy desperately needs and the voters urgently want.

Budowsky was an aide to former Sen. Lloyd Bentsen and Bill Alexander, then chief deputy majority whip of the House. He holds an LL.M. degree in international financial law from the London School of Economics. He can be read on The Hill’s Pundits Blog and reached at brentbbi@webtv.net.