WASHINGTON — President Barack Obama announced Monday several steps aimed at getting America’s veterans back to work, but analysts say the key component of the program – tax credits for hiring veterans – won’t work.
The Returning Heroes and Wounded Warrior Tax Credits of 2011 would give a $2,400 tax credit to businesses that hire short-term unemployed veterans. Additionally, it would provide up to $5,600 in tax credits for hiring a veteran who has been out of work for six months or longer. The tax credit is even bigger for hiring unemployed, disabled veterans –up to $9,600 per employee.
Senate Democrats are pushing the tax credits through as an amendment to a House bill, which would repeal the 3 percent withholding on payments made by the government to contractors. The bill is scheduled for debate on the Senate floor for this week.
Despite praise from veterans affairs groups such as Disabled American Veterans and the American Legion, tax credit analysts say the short-term policy won’t work in an uncertain market.
“When a business adds a new worker, they’re looking to that person to increase their profitability over the long term –five or 10 years,” said Curtis Dubay, a tax policy analyst at the Heritage Foundation.
“A tax credit of a few thousand dollars doesn’t really help that calculation. “
The complementing three-step plan is aimed at helping ex-military personnel identify their skills and connect them with employers specifically looking to hire veterans.
The first part of the plan is a program called the Veteran Gold which entitles post-9/11 service members up to six months of individualized career counseling.
The administration has also directed the Department of Labor to launch a website, that will help veterans find a place for their military skills in the civilian workforce.
“If you can save a life on the battlefield, you can save a life in an ambulance,” Obama said. “If you can oversee a convoy or millions of dollars of assets in Iraq, you can help a business back home manage their supply chain or balance their books.”
Finally, the administration launched the Veterans Jobs Bank, a website similar to Monster.com or CareerBuilder.com, that allows companies to tag job openings as seeking veterans.