Obama Demands Immediate Action on $447B Jobs Plan
Business + Economy

Obama Demands Immediate Action on $447B Jobs Plan


President Obama tonight urged Congress to act “right away” on a $447 billion package  of tax incentives, aid to the states and public works projects to jumpstart the economy and address one of the worst unemployment crises in modern U.S. history.

In a nationally televised address to a joint session of Congress, the politically beleaguered president gave a rousing speech warning that Americans were running out of patience with Washington’s partisan warfare, and vowing to take his plan to “every corner of the country.” And in a direct appeal to his Republican foes who have warned the president would try to spend his way out of the recession by adding to the deficit, Obama stressed that “everything in this bill will be paid for—everything.”

“The people of this country work hard to meet their responsibilities,” Obama said in the chamber of the House of Representatives.  “The question tonight is whether we’ll meet ours.  The question is whether, in the face of an ongoing national crisis, we can stop the political circus and actually do something to help the economy; whether we can restore some of the fairness and security that has defined this nation since our beginning. “

Much of Obama’s plan, called “The American Jobs Act,” has been widely reported in the past few days, and the speech offered few real surprises, except for the $447 billion price tag that was substantially higher than the $200 billion to $300 billion previously reported, and more than half the size of the $825 billion stimulus package enacted in late 2009.  The heart of the plan  calls for new highway, bridge and mass-transit spending, housing aid, including an expanded program for refinancing properties; and new programs to help retrain the unemployed and assist them in finding work.

Obama also urged Congress to extend a 2 percentage point payroll tax cut and unemployment benefits for the long-term jobless, as well as approve other tax cuts and incentives to put cash in Americans’ pockets and spur business to hire more workers. He also called for a direct cash infusion to state and local governments to help avert the layoff of teachers, police and other public employees.

Obama said he will ask a new congressional “super committee” that began meeting today and is charged with seeking up to $1.5 trillion of additional deficit reduction to “increase that amount so that it covers the full cost” of his jobs package. He pledged to unveil a long term deficit reduction plan Sept. 19 that would underwrite the cost of his jobs initiatives while stabilizing the long term debt.

The president’s proposed legislation, called “The American Jobs Act,” would do the following:

1) Extend the payroll tax cut.  The measure would extend the 2 percentage point payroll tax cut for workers, which will add up to about $1,500 for the typical working family.  (cost -- $175 billion)

2) Tax cuts and incentives for businesses to hire. This would cut small businesses payroll taxes in half (to 3.1 percent) in 2012, and give businesses a $4,000 tax credit to hire anyone unemployed for more than six months.  (cost -- $70 billion)

3) Aid for the long-term unemployed.  The bill would extend unemployment benefits for the long-term unemployed for one year.   (cost -- $49 billion) It would also    create a worker retraining initiative that will allow jobless workers to obtain temporary jobs and training while collecting unemployment insurance.  (cost -- $5 billion). It would also create a new tax credit to give the long-term unemployed. (cost -- $8 billion)

4) Invest in infrastructure and construction. The measure would create an infrastructure bank that will meld public and private funds together to disburse loans to states and localities to fund new highway, bridge, and mass transit projects.  This plan would renovate at least $35,000 schools, reconstruct or repurpose vacant buildings, rehire laid-off teachers and police officers, and invest billions in added funding to surface transportation.  (cost -- $140 billion)

5) Housing aid.  The bill would expand and loosen regulations on a program to help homeowners refinance their mortgages at a 4% rate. Obama said would give families more than $2,000 in extra cash and help bolster housing prices.  (cost unclear)

6)  Fast-tracked trade agreements .  “It’s time to clear the way for a series of trade agreements that would make it easier for American companies to sell their products in Panama, Colombia, and South Korea—while also helping the workers whose jobs have been affected by global competition….I want to see folks in South Korea driving Fords, Chevys and Chryslers.”  (Unclear price tag)

7) End tax breaks for the rich.  Obama will introduce a plan in two weeks to end tax breaks for millionaires and billionaires and oil and gas companies in order to cut the corporate tax rate. .  (revenue implications unclear)

“The purpose of the American Jobs Act is simple,” Obama said “To put more people back to work and more money in the pockets of those who are working.  It will create more jobs for construction workers, more jobs for teachers, more jobs for veterans, and more jobs for the long-term unemployed.”

Obama’s much anticipated speech was not the block buster that many of Democrats and liberals were hoping for, yet the president offered a forceful delivery and occasionally prompted applause from both sides of the aisle.  The president opened by noting that journalists and commentators have been speculating all week what the speech would mean for Obama, Congress and the outcome of next year’s election.

“But the millions of Americans who are watching right now: they don’t care about politics,” he said. “They have real life concerns. Many have spent months looking for work. Others are doing their best just to scrape by – giving up nights out with the family to save on gas or make the mortgage; postponing retirement to send a kid to college.”

Obama, whose job approval rating is at an all-time low, sought to rally public support with a speech that was at turns combative and conciliatory. While warning Republicans that he was willing to take his case to the public, just as President Harry Truman once ran against a recalcitrant Congress in 1948, he repeatedly noted that virtually all of his proposals have been supported at one time or another by Republicans as well as Democrats.

However, in perhaps the most dramatic moment of his speech, Obama challenged the Republicans on the basic issue of whether the solution to the economic crisis was simply to cut most government spending and slash regulations, as the GOP insists.

“Well, I agree that we can’t afford wasteful spending, and I will continue to work with Congress to get rid of it,” he said. “And I agree that there are some rules and regulations that put an unnecessary burden on business at a time when they can least afford it. But  what we can’t do – what I won’t do – is let this economic crisis be used as an excuse to wipe out the basic protections that Americans have counted on for decades. I reject the idea that we need to ask people to choose between their jobs and their safety.”

Perhaps the biggest unanswered question is how the president would pay for his plan, and whether he could persuade Republicans to support at least part of his plan. Obama has repeatedly called for a balanced approach to reducing the deficit while taking short-term measures to try to revive the economy and reduce the 9.1 percent unemployment rate.  That would mean a combination of spending cuts, entitlement reforms and tax increases or elimination of wasteful tax loopholes.

However, GOP leaders have repeatedly said they would not support tax increases or even loophole closers unless they were offset by other tax cuts so that there was no net increase in tax revenues.

Republicans offered a mostly tepid response to the president’s speech, delivered in the House of Representatives chamber. With few exceptions, House Speaker John Boehner, R-Ohio, and Senate Republican Leader Mitch McConnell, R-Ky., sat stone faced throughout the president’s speech.

Sen. Orrin Hatch, R-Utah, the ranking Republican on the Senate Finance Committee, said: “The President’s plan is nothing new. It simply doubles down on the same failed policies that he has pursued before. We need a different approach.  That means pursuing meaningful tax reform, serious deficit reduction, and regulatory roll-back, all of which would have a positive impact on job creation.”