With great fanfare, the President in his 2010 State of the Union address announced a new small business tax credit that will go to “over one million small businesses who hire new workers or raise wages.” A White House fact sheet described the credit as a “powerful short term incentive to not only create good jobs but to increase wages and hours for Americans with jobs.”

Providing a credit to businesses that raise jobs or payrolls has been discussed over the past year as a possible anti-recession measure. My colleague Howard Gleckman has written several posts expressing skepticism of its effectiveness, while some academic economists have defended the idea. As with any other policy proposal, the devil is often in the details, so I eagerly awaited the release of the President’s budget and the Treasury Department's Green Book for a more complete description of the proposal and revenue estimates.

To my surprise, however, I could not find the proposal either in the Green Book or the chapter in the Analytical Perspectives volume of the budget that lists revenue proposals. Thanks to my more persistent and diligent colleagues, I can report that the category labeled “Allowances” in the list of revenue proposals on page 188 of “Analytical Perspectives” does contain a budget line item for “jobs initiatives.” This item will cost the Treasury $12 billion in fiscal year 2010, $25 billion in fiscal year 2011, and an additional $13 billion in fiscal years 2012-2014 – in the ballpark of what Administration spokespersons indicated the new jobs credit is likely to cost. There is, however, no description of the actual proposal in the budget documents, possibly because some details were resolved at the last minute or are still unresolved.

The alert reader of the Green Book would have been tipped off to this estimate by footnote #3 of the revenue table on page 150, which reads: “Table 14-3 in the Analytical Perspectives of the FY 2011 Budget includes the effects of a number of proposals that are not reflected here. These proposals include the making work pay credit, increase fees for Migratory Bird Hunting and Conservation stamps, change retention policy for consular fees, trade initiatives, integrate program integrity adjustments — IRS, revise terrorism risk insurance program, and the allowances of health insurance reforms and jobs initiatives.”