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Obama Unveils $447B Jobs Package

6:50 PM, Sep 8, 2011   |    comments
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WASHINGTON -- The package, more than half the size of Obama's $825 billion economic stimulus plan passed in February 2009, would slash payroll taxes in half next year for employees and small businesses, extend unemployment benefits, and create or save jobs for teachers, police and firefighters, and construction workers.

"You should pass this jobs plan right away," Obama said in his prepared remarks for the joint session of Congress. "There should be nothing controversial about this piece of legislation. Everything in here is the kind of proposal that's been supported by both Democrats and Republicans, including many who sit here tonight. And everything in this bill will be paid for."

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The president didn't say how he would pay for his proposals but promised to do so as early as next week when he submits a deficit-reduction plan to a congressional committee charged with cutting red ink by at least $1.2 trillion over 10 years. Obama will add at least $447 billion more to the task.
The plan includes these main elements:
Cutting the 6.2% payroll tax paid by both employees and employers to 3.1% next year. This year, only employees got a 2-percentage-point cut. That would cost $240 billion, more than half of the total package.
Spending $140 billion to save the jobs of state and local teachers and first responders, repair deteriorating schools and rebuild roads, railways and airports.
Extending jobless benefits to the unemployed, with special emphasis on those out of work at least six months and those in low-income neighborhoods.
While most elements of Obama's plan have been tried before with limited success, packaging them together into such a large package marked a bold move for a White House that has been on the defensive for spending so much already, with so little in the way of economic statistics to show for it.
And delivering the speech before a joint session of Congress a format used only three times in the past two decades except for State of the Union addresses represented another risky venture for a president known for his speechmaking ability.
Republicans blasted the plan even before it was released, just as they have attacked the original stimulus plan for failing to create robust growth and tame the nation's 9.1% unemployment rate. Most independent economists say the first plan helped, but only to prevent a full-fledged depression.
s"This isn't a jobs plan. It's a re-election plan," said Senate Republican leader Mitch McConnell of Kentucky. "It's time the president start thinking less about how to describe his policies differently and more time thinking about devising new policies."
That said, it remains unclear how a divided Congress will deal with Obama's proposal. Republicans don't like the concept of government stimulus, and nearly all of them voted against the initial version. But they also favor tax cuts and infrastructure improvements, which represent the twin centerpieces of the plan.
"I think there are opportunities" for compromise, said Douglas Holtz-Eakin, a top Republican economist who served as 2008 GOP presidential candidate John McCain's top domestic policy adviser. Obama "can prove a lot of the skeptics wrong, but he has to change his playbook."
That would mean finding a way to pay for his package without raising taxes, which most Republicans would oppose. But without that option, Obama would have to get savings from entitlement programs such as Medicare and Social Security proposals certain to be opposed by many of his liberal allies.
In his prepared remarks, Obama alluded to the difficult political path ahead: "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," he said.
Those types of comments were not expected to sit well with Republicans. While GOP leaders have spent much of the past 2 ½ years trying to block Obama's initiatives, they came into this week sounding more conciliatory. In the Republican-run House, they plan to spend the fall focusing on regulatory relief something the White House argues won't create jobs.


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