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Obama reveals $450 billion plan to create jobs, includes tax cuts

Kevin Lamarque | AP
Kevin Lamarque | AP
President Barack Obama delivers a speech to a joint session of Congress at the Capitol in Washingtonon Thursday, Sept. 8, 2011. Watching are Vice President Joe Biden and House Speaker John Boehner.
By BEN FELLER, AP White House Correspondent

WASHINGTON — Confronting an economy in peril, President Barack Obama unveiled a larger-than-expected $450 billion plan Thursday night to boost jobs and put cash in the pockets of dispirited Americans, urging Republican skeptics to embrace an approach heavy on the tax cuts they traditionally love. With millions of voters watching and skeptical of Washington, Obama repeatedly challenged Congress to act swiftly.

The newest and boldest element of Obama’s plan would slash the Social Security payroll tax both for tens of millions of workers and for employers, too. For individuals, that tax has been shaved from 6.2 percent to 4.2 percent for this year but is to go back up again without action by Congress. Obama wants to deepen the cut to 3.1 percent for workers.

“This plan is the right thing to do right now,” Obama said after a divided body rose in warm unison to greet him. “You should pass it. And I intend to take that message to every corner of this country.”

In his televised address to Congress, Obama sought to provide a jolt for the economy, still staggering on his watch, and for his own standing at one of the lowest marks of his presidency. He put forth a jobs plan that he hopes can get bipartisan support and spur hiring in a nation where 14 million people remain out of work and the jobless rate is stuck at 9.1 percent. Public confidence in his stewardship of the economy is eroding.

Obama did not venture an estimate as to how many jobs his plan would create. He promised repeatedly that his plan would be paid for, but never said how, pledging to release those details soon.

The president also would apply the Social Security payroll tax cut to employers, halving their taxes to 3.1 percent on their first $5 million in payroll. Businesses that hire new workers or give raises to those they already employ would get an even bigger benefit: On payroll increases up to $50 million they would pay no Social Security tax.

Obama also proposed spending to fix schools and roads, hire local teachers and police and to extend unemployment benefits. He proposed a tax credit for businesses that hire people out of work for six months or longer, plus other tax relief aimed at winning bipartisan support in a time of divided government.

The four members of Maine’s congressional delegation each applauded the president’s move toward addressing the nation’s economic difficulties.

First District Rep. Chellie Pingree, a Democrat, said in a statement: “The President tonight presented a concrete jobs plan but it will only work if we can get the consensus to get it passed right away. The middle class in this country is on the ropes and it’s time for Congress to put politics aside and do the work necessary to get the economy moving again.”

Second District Rep. Mike Michaud, a Democrat, said in a statement that he agreed with the president that bipartisanship must be put aside to “focus on improving and updating our nation’s transportation and infrastructure. … It’s something that many of us in Congress have been calling for serious action on for

years, and I’m glad to see that the President has finally come around on the need to act.”

Sen. Olympia Snowe, a Republican, in her statement said: “Tonight, the President opened the conversation our nation requires to address the most pressing crisis facing American families, and that is how to create jobs in our economy. While the President’s engagement on this urgent matter is long overdue, finally Congress and the Administration can begin the process of working through specific proposals.”

And Republican Sen. Susan Collins, while praising the president’s desire to address the economic problems, said she was “disappointed that it took him so long to come forward before with specific proposals to help our economy and create jobs in the private sector,” adding that she also was “concerned that the President has not yet detailed how he would pay for nearly $500 billion in new spending.”

Obama, under soaring expectations for results, sought to put himself on the side of voters who he said could not care less about the political consequences of his speech.

“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,” Obama said.

His aim Thursday night was to put pressure on Congress to act — and to share the responsibility for fixing the economic mess that is sure to figure in next year’s elections. For every time he told lawmakers to “pass the bill” — and he said over and over — Democrats cheered while Republicans sat in silence.

Tax cuts amounted to the broadest part of Obama’s proposal — in essence, a challenge by the Democratic president to congressional Republicans to get behind him on one of their own cherished economic principles or risk the wrath of voters for inaction. The tax cuts alone would amount to roughly $250 billion.

The president said deepening the payroll tax cut would save an average family making $50,000 a year about $1,500 compared to what they would if Congress did not extend the current tax cut.

“I know some of you have sworn oaths to never raise any taxes on anyone for as long as you live,” Obama said, a reference to the conservative tea party influence on many House Republicans. “Now is not the time to carve out an exception and raise-middle class taxes, which is why you should pass this bill right away.”

Politics shadowed every element of Obama’s speech. He implored people watching on TV to lobby lawmakers to act. He did the same thing before his speech in an email to campaign supporters, bringing howls of hypocrisy from Republicans who wondered why Obama was telling them to put party above country.

The American public is weary of talk and wary of promises that help is on the way.

In one striking sign of discontent, a poll showed nearly 80 percent of people think the country is headed in the wrong direction. That’s about the same level of pessimism as when Obama took office. It reflects both persistently high unemployment and disgust with Washington infighting.

No incumbent president in recent history has won re-election with the unemployment rate anywhere near the current 9.1 percent.

Obama’s jobs plan put a special emphasis on the long-term unemployed — those who have been out of work for six months or more. He repeated his calls for a one-year extension of unemployment insurance in order to prevent up to 6 million people from losing their benefits, and he proposed a $4,000 tax credit for businesses that hire workers who have been out of work for more than six months .

A key part of Obama’s approach was to appeal to the lawmakers in front of him to pass a deal, and to position them for blame for inaction should the jobs plan fall short.

“The next election is 14 months away,” he said. “And the people who sent us here — the people who hired us to work for them — they don’t have the luxury of waiting 14 months. … They need help, and they need it now.”

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