A few weeks ago, Alexi Giannoulias’s Illinois Senate campaign claimed, “Every proposal outlined by Alexi includes a counter-part offset to ensure that it is deficit neutral.” But a closer examination of Giannoulias’s economic plan reveals it would increase America’s debt by more than $200 billion.
This shouldn’t surprise anyone. Alexi Giannoulias and money are a bad combination.
The family bank he helped lead for four years as vice president and senior loan officer lies six feet under, taken over by the FDIC in April, costing the government nearly $400 million.
The college savings program he ran as state treasurer (he is still state treasurer) has already lost $150 million, a devastating blow for Illinois taxpayers.
And now, running for the U.S. Senate, Giannoulias wants to serve on the Senate Banking Committee, where he would no doubt help drive the United States further into debt.
Giannoulias is an unabashed big spender running for office in an anti-spending election. Giannoulias supported Obamacare, and said that the stimulus “should have been even bigger.”
So it’s no wonder he would propose a jobs plan that increases the national debt by $200 billion.
Let’s look at the math. On the campaign trail, Giannoulias often speaks about his “FutureWorks” plan, which would: 1) extend the tax credit for first-time homebuyers; 2) create a payroll tax holiday for low- and middle-income Americans; and 3) establish a job creation tax credit. And to pay for it all, Giannoulias said he would repeal “the corporate tax loophole that rewards the shipping of jobs overseas.”
The homebuyer tax credit is relatively easy to price out. The Federal Government estimated the cost of the first-time homebuyer tax credit at $6.6 billion. Ted Gayer at the Brookings Institute estimates that the true cost of the credit to be closer to $15 billion. Extending the credit for another year, comes in somewhere between another $6.6 to $15 billion.
The “job creation tax credit” we can dispense with quickly, mostly because its cost is impossible to quantify since Giannoulias does not say how much the tax credit would be worth.
Most interesting is Giannoulias’s plan to give a one-year payroll tax holiday on the first $20,000 in income for workers making less than $75,000 a year. When he says payroll tax, he is referring to Medicare and Social Security taxes, which are a combined 7.65 percent. Working off data from the Census Bureau’s 2008 Current Population Survey, Giannoulias’s tax holiday would cost roughly $220 billion.
Leaving out the jobs tax credit, Giannoulias’s jobs plan would cost at least $227 billion for a single year. To pay for this, Giannoulias proposes “repealing the corporate tax loophole that rewards the shipping of jobs overseas.” This proposal, he says, “would raise nearly $200 billion.” On its face, Giannoulias’s plan is already in the red. But it gets much worse.