Economy:

QGA's Hoppe says president's jobs proposal will do little to boost the economy

Will the president's jobs plan have a significant impact on unemployment numbers? How will efforts to move a jobs bill affect the deficit special committee's work? During today's OnPoint, Dave Hoppe, president of Quinn Gillespie & Associates, gives his take on the president's proposal and previews the special committee's policy priorities.

Transcript

Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is David Hoppe, president of Quinn Gillespie and Associates. Dave, it's great to have you back on the show.

Dave Hoppe: Nice to be here, Monica, thank you.

Monica Trauzzi: Dave, with the president laying out his jobs plan next week, it's now up to Congress to act. Did the president hit the mark and offer up something that both parties can come together and agree on?

Dave Hoppe: I think there are pieces of what the president offered that you'll find Republican support for and there are pieces that they will want to add in. It will be, I think, intriguing to watch initially how the Senate and the House go about debating this. My guess is the Senate has-at least looks like they want to move this very quickly and I think they'll move it in a way that allows for no amendments, sort of a take it or leave it basis, file cloture, fill up the tree, those sorts of things. On the house side I think they'll split it apart and take the pieces they like and try and move those forward with some pieces of their own and then see where we end up. So, I think there's going to be a little bit of politics on both sides of the House and the Senate, as well as from the White House point of view.

Monica Trauzzi: Politics aside, did he offer up something that actually could do something on jobs?

Dave Hoppe: I have to say I don't think there's a lot of long-term job opportunity here. I think what you've got are some pieces that can have an impact on jobs in the short run, but tend to be like the Cash for Clunkers and transfer a job from one time to another. There are ways for getting to some of these-changing some of these policies and I think that you can find some bipartisan support for, but I think they're pretty fundamental changes. And nobody is looking at that right now as far as I can see. So, we'll just have to wait and maybe that will come along through the presidential campaign and the next term, whoever is elected.

Monica Trauzzi: And what are some of those key things that you think people look at?

Dave Hoppe: I think we need really significant tax reform. Look, taxes are for one purpose, to raise the money you need to run your government. It ought not to be to say to this person or that person or of the government direct everything everybody does. I mean, not that I don't like some of those. I like the mortgage interest deduction too, but what we really need is a tax policy that says this is how much we need, what is the most efficient way to get that money and we'll decide how to spend it over here. And that calls for something I think like 1986, where you had bipartisan support for really significant reform in the tax code and a leveling of the rates, a lowering of the rates, getting rid of a lot of the deductions and a lot of the instructions that the tax code has in it. I think that would be a good start trying to solve some of our problems and free up what is really the opportunity we have, which is all this money that's sitting in private corporations and other places on the sidelines, that they aren't investing right now because of uncertainty, because of the tax code, because of regulations, whatever it may be. If we solve some of those tax code problems for a longer time, I think that money starts to come again and that's what we have to get to get jobs moving.

Monica Trauzzi: So, in the background of the jobs discussion is the debt super committee, which was created earlier this summer. How is the super committee's work going to play into the jobs talks?

Dave Hoppe: I think it's going to be in sort of an interesting back-and-forth. First of all, Washington usually can take up one really big issue at a time and we talk about the oxygen being taken out of the room. Well, you've got two really big things happening right now, the president's jobs bill and the effort that everybody wants to get to kernel more jobs and you've got the special committee. And the special committee is empowered with trying to reduce the debt or the deficit I guess I should say right now, and in the long term the debt. The president, however, also said Thursday night you guys sort of figure out how to pay for it, but I think he's also going to give them some ideas on how to pay for it. So the two will be intertwined a little bit, but I think in the end you will have a faster movement of a jobs proposal that may be ready for some legislative action by the end of the month, by the early part of October and maybe, depending upon how they can compromise, even have something done before the end of October. And then you've got the next step, which will be the special committee which has to report on November 23 and, if they report something, have that taken up before Christmas.

Monica Trauzzi: How effective can the special committee be? How much flexibility are they being given?

Dave Hoppe: I think they have plenty of flexibility, but I think there is really two possibilities for what they will do. One is sort of throw out all of the rules and say we're going to do something really big and that would be significant tax reform, real entitlement changes to make the entitlements work better and cost less and be available for those who need that safety net, and ultimately they'd have to do something on regulations I think as well, which they could do. But it doesn't look like they're going in that direction. The other one is to get as much savings as they can and I think there's probably something between $900 billion and $1 trillion worth of savings that they could find without breaking anybody's back and that may be where they come out, which would lower the sequester to someplace in the 200 to 250 billion range.

Monica Trauzzi: How would you expect them to handle energy and environment priorities?

Dave Hoppe: I don't think there will be a lot of talk about those. I don't think they're going to get into it, especially if they do it I was saying as the latter option, which is just, you know, $900 billion to $1 trillion. I don't think they're going to touch much in the way of tax incentives and there may be some areas where they pull some money and some of the programs back, but I don't think there will be a huge impact on energy. I think that waits for either a later time or it waits for when there's really some significant tax reform and other reform policies that would touch a lot of areas in energy.

Monica Trauzzi: So, earlier this year all the talk was about energy subsidies. Do you think that that's kind of kind of going to wane down at this point?

Dave Hoppe: Oh yeah, that's-I think that's going to be talk for a long time and not going to come to fruition. I just can't imagine it right now. They just don't have the money to do it and we've had some hiccups in this obviously, the Solyndra situation is not one that people see as a model for going forward and it wasn't a model for anybody. There are problems there, I don't know what they are, but those sorts of things will cast sort of a pall over doing much in the area of incentives for green energy.

Monica Trauzzi: So, based on what the president laid out, would you say that he has backpedaled from his clean energy agenda?

Dave Hoppe: I think he has and I don't think he necessarily has let it go, I think it's just on the back burner. And maybe I'd use that phrase as opposed to backpedaled. I also think he's caught a little bit. He does really believe in that and thinks it's what the future ought to be and he has disappointed some of his real core supporters in not being more aggressive. And I think in the fall and in the next year you'll see that he's going to be less aggressive. He can't go the other way, which is to sort of carbon forms and base forms of energy, because that would really be-they would see-some of his core supporters would see that as almost an attack on them. So, I think he's going to be sort of limited and we'll just have much less talk about energy all the way across the board.

Monica Trauzzi: All right, a lot going on this fall, a lot to watch.

Dave Hoppe: A lot of it.

Monica Trauzzi: Thanks for coming on the show.

Dave Hoppe: My pleasure. Thank you, Monica.

Monica Trauzzi: And thanks for watching. We'll see back here tomorrow.

[End of Audio]

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