The Economy and Jobs

Alan Khazei knows how to create jobs because he has done it. As an entrepreneur and founder of successful civic non-profit organizations, Alan found new and innovative ways to create thousands of public and private sector jobs. In 1988 he co-founded City Year, a community service organization that has employed thousands of people who wanted to give back by volunteering their time to mentor kids at high poverty schools and find ways to improve the lives of people in low income neighborhoods. And he worked with President Clinton and Senator Kennedy to help craft and pass legislation that created AmeriCorps and the Kennedy Serve America Act — providing a paycheck with a purpose for hundreds of thousands of Americans.

In the U.S. Senate, Alan will use that experience and an “all hands on deck” approach that leverages the public, private, and non-profit sectors to create good paying jobs and get unemployed Bay Staters back to work. Alan understands that there is no better social program then a good paying job with benefits, and if elected to the Senate, his top priority will be to get our economy growing.

Alan recognizes the potential we have right here in our own backyard. Massachusetts is on the leading edge of the economy of the future, in industries like high tech, green tech, clean energy, higher education, tourism, health care, life sciences and biomedical. Alan will use his experience from the private and public sectors to help foster industries and jobs like these through:

• Job creating tax cuts
• Investments in our nation’s infrastructure
• Supporting small business development
• Promoting clean energy jobs
• Full funding for community service programs through the Kennedy Serve America Act
• Supporting our colleges and universities in creating the jobs of the future

As a candidate who has created jobs through both federal legislation and founding startups, Alan Khazei is the Senator that will help put the people of Massachusetts back to work.

Start With the Facts 263,000 Massachusetts residents were unemployed in June 2011. The last 2 years have seen the nation’s highest levels of unemployment since 1983. For every job opening there are more than 4 unemployed workers. The average unemployed American has been looking for work for 39 weeks - the longest period since the Labor Department started keeping track in 1948.

Alan’s Plan

Job-Creating Tax Cuts

Alan supports investing in a Job Creation Tax Credit that would give employers a refundable tax credit of 15% of the 2011 salary and 10% of the 2012 salary for all new jobs created (up to a salary of $106,000).

Investments in our nation’s infrastructure

Alan will fight to ensure passage of Senator John Kerry’s proposal for a $10 billion Infrastructure Bank so that we can improve our infrastructure and create much needed jobs. This “bank” will provide loan guarantees for bridges, rail, and other infrastructure projects that would leverage as much as $640 billion in private funds over 10 years. This proposal has been endorsed by both the Chamber of Commerce and organized labor and should be enacted immediately.

Unemployment Insurance Job Creation Vouchers

Alan supports providing states with the flexibility to modify their unemployment insurance programs so that benefits can be converted from checks sent to people who are unemployed into payments made to employers who hire people who had been collecting unemployment benefits. The amount of the check would equal the total amount of unemployment benefits that the employee would have received had they remained unemployed. The company would receive the payment after the new employee had been employed for a sufficient period of time such that they had been paid this amount in salary.

These vouchers could be used only for people hired into newly-created jobs or existing jobs previously held by workers who left voluntarily or who were terminated for cause. This would prevent companies from firing existing employees to hire new employees who are eligible for these vouchers. A minimum duration of employment would prevent employers from firing these new workers as soon as the voucher or credit ended.

Support Small Businesses

Alan understands that small businesses are a cornerstone of the US economy. If elected to the Senate, he will fight for small businesses so that they can grow and prosper with the following initiatives:

• Increase the Job Creation Tax Credit for small businesses to 15% for both years.
• The Small Business Start-up Savings Accounts Act to help businesses with 500 or fewer employees save up to $10,000 in tax deferred accounts to grow their companies.
• Strengthening programs that provide loans and grants to the nation's small, high-tech, innovative businesses such as the Small Business Innovation Research program, the Small Business Technology Transfer program, and the U.S. Department of Energy’s Advanced Research Projects Agency-Energy (ARPA-E) program. In the first four rounds of ARPA-E grants, 16 Massachusetts institutions and companies received a total of $62.8 million which is 13% of the total grants awarded nationwide and 17% of the total dollars awarded.
• Alan supports Senator John Kerry’s Startup Visa Act to give immigrant entrepreneurs a 2 year visa if they have US investors willing to support their startup businesses.
• Simplification of the tax code so small businesses can spend more time on their business and less time and money on tax paperwork. A 2007 study by the IRS found that very small businesses spend 15-18% of revenues on tax compliance.

Alan has also called for initiatives to support the creation and growth of women- and minority-owned businesses. He will work with these businesses to develop specific programs designed to help them thrive, including:

• Establishing a federal commission to encourage and support women- and minority-owned businesses. Among other responsibilities, the commission will ensure that current federal participation goals are being fairly and adequately met.
• Study the impact of intermediaries like micro-lending companies and other businesses and organizations dedicated to supporting women- and minority-owned businesses to identify best practices and opportunities to grow their scale and impact.
• Provide more transition support for businesses moving to non-SBA 8(a) status.

Invest in Clean Energy and Manufacturing Jobs for the 21^st Century

Alan Khazei feels strongly that developing the technology to power America and the world in the 21^st century must be an urgent national priority. Opportunities to create cleaner and more renewable energy can create millions of jobs while protecting the environment through initiatives such as expanding the Energy Efficient Commercial Building Tax Deduction and the use of PACE (Property Assessed Clean Energy) bonds, and by growing successful programs like Renew Boston, which provides free building energy assessments and upgrades to low and moderate income Boston residents.

Charlestown is now home to the Massachusetts Clean Energy Center’s Wind Technology Testing Center, the world’s largest wind turbine blade testing facility which opened in May with the support of $27 million of federal funding. In Fall River, TPI Composites has opened a wind blade innovation center that will ship blades by barge to Charlestown for testing. Synergies like this, along with the development of Cape Wind as America’s first offshore wind farm, can help Massachusetts expand the presence of local manufacturing in the years to come.

Alan will sponsor creation of a new Solar on Schools program that will provide government loans and loan guarantees and incentivize public-private partnerships between schools, businesses, municipal offices, the federal government, local banks, and electric utilities to install millions of solar panels on the roofs and grounds of schools and other public buildings. This plan will create millions of jobs in fabrication, assembly, installation, and maintenance of the panels as well as new roofs for older buildings (a pre-requisite for solar installations). These installation, roofing, and maintenance jobs cannot be outsourced and therefore must be created locally. The savings extend to the useful life of the systems, typically a minimum of 25 years. Installing solar energy systems will reduce energy costs and the savings will help municipalities and states manage their energy budgets with more certainty in electric rates. In addition, the program reduces the carbon footprint of the buildings. Under Alan’s plan, the Federal government would supply loan guarantees for the initial capital investment that would be paid back in full within 10-20 years through energy savings.

Expanding Opportunities for Service

The Kennedy Serve America Act should be fully funded and implemented now to create 250,000 jobs nationally and 8,000 in Massachusetts. Instead, led by Republicans in Congress the Corporation for National and Community Service 2011 budget was cut by $74 million, reducing opportunities for Americans of all ages to serve.

Protecting homeowners’ investment in their homes and stabilizing the housing market

The genesis of our current record unemployment rates can be traced at least partially to the fall in home prices and the mortgage foreclosure crisis. Consumer confidence fell in line with declining home prices and families stopped spending. Home foreclosures and anemic home sales increased demand for rental units which increased rents, especially in areas like Boston. Higher rents further decreased consumer spending and demand for goods which resulted in layoffs and hiring freezes. Stabilizing home values and increasing home sales are key imperatives for a successful recovery and creating good paying jobs in Massachusetts and across America. Alan supports the following initiatives to stabilize home prices and increase consumer confidence:

• Reducing Home Foreclosures

Reducing the damage of home foreclosures is a critical part of growing our economy. Foreclosures hurt lenders, homeowners, and the community at large by decreasing home values. And until the housing market recovers, we are unlikely to see a broader economic upswing. Alan will pursue solutions such as giving families facing foreclosure the right to rent their homes at the market rate, providing adequate legal support to low-income homeowners facing foreclosure, and the Limiting Investor and Homeowner Loss in Foreclosure Act which would allow bankruptcy court judges to order foreclosure mediation between homeowners and lenders.

• Establish a Home Price Insurance Program

Alan supports an agile, proactive, temporary home price insurance program promoted by Dr. Barry Bluestone, Dean of the School of Social Science, Urban Affairs & Public Policy and Director of the Dukakis Center for Urban & Regional Policy at Northeastern University.

Under this plan, in order to encourage credit-worthy potential homebuyers to consider purchasing homes now rather than waiting for prices to fall further, the U.S. Treasury, in conjunction with the U.S. Department of Housing and Urban Development, will develop a home price insurance program open to all households who purchase a home or condominium for their primary residence any time over the next 18 months.

This no-cost insurance will cover 85% of any loss a homebuyer may experience as the result of selling their new home at a lower price in the future, up to $100,000.  To deter speculative and undercapitalized investments, this program will only be available on primary residences purchased with a minimum down payment of 10% and where strict conventional mortgage underwriting standards apply. To qualify, homebuyers must own their home for three years.

With the program limited to 18 months from enactment, potential homeowners who wait beyond 18 months lose the option of taking advantage of this insurance coverage, resulting in immediate growth in house sales.  In addition, if the program works as expected, home prices will begin to stabilize and in many markets may begin to rise.  Stabilizing or rising home values will result in a zero-cost program to the government. A small processing fee for the insurance will cover the cost of administering the program.

Visa Reform to Generate More Tourism

Alan Khazei supports creating jobs by increasing tourism - a vital engine for job-creation that creates $20 billion of economic activity to Massachusetts each year. The B-2 tourist visa program should be reformed to reduce the wait time for visas to be issued to foreigners who wish to visit the United States. It can take as long as 142 days for residents of Brazil and China to get a visa to visit the US versus 11 days for clearance to visit Western European countries. The US Travel Association estimates that increasing the number of foreigners who visit the US would create 1.3 million jobs by 2020 with an $859 billion increase in economic output.

Creating a more inclusive economy

The Unites States Tax code should be modified so tax breaks for profit-sharing and stock options apply only if they are shared broadly with both top executives and average employees, a requirement that already applies to pensions and health care benefits.

Tax Reform to Create American Jobs

Our tax code can play a key role in encouraging companies to grow and create new jobs here in the US. But today we have a corporate tax system that too often encourages companies to create jobs in other countries.

Alan supports corporate tax reform that rewards companies for creating jobs here at home. One opportunity is to eliminate the tax deduction that businesses can claim for the cost of closing American factories and offices, moving their equipment and jobs to another country, and training the foreign workers that replace the American workers. In 2010, Scott Brown voted against the Creating American Jobs and Ending Offshoring Act which would have eliminated this loophole. In the US Senate, Alan Khazei will make sure that America’s tax code encourages the creation of American jobs.