Seattle Times news service
WASHINGTON — President Obama urged Congress on Thursday night to end the “political circus” and act to help a nation still facing economic hardship, outlining a $447 billion legislative package that includes tax cuts for working families and small businesses and spending to rebuild infrastructure.
The president, in an address to lawmakers, argued there “is nothing controversial” about his plan — though the price tag was larger than expected and, perhaps, more than the Republican-led House will seriously consider.
The proposal drew familiar partisan responses: Throughout Obama’s address, Democrats leapt up and applauded, while Republicans mostly sat. Republicans joined in six times — most enthusiastically when Obama reminded them the election is 14 months away, and “the people who sent us here … they don’t have the luxury of waiting 14 months” for economic help.
There was agreement on the nature of the economy’s problem, and even some general consensus that it’s worth cutting taxes and perhaps even extending jobless benefits to address August’s 9.1 percent unemployment rate.
“The proposals the president outlined tonight merit consideration. We hope he gives serious consideration to our ideas as well,” said House Speaker John Boehner of Ohio. “It’s my hope that we can work together to end the uncertainty facing families and small businesses, and create a better environment for long-term economic growth and private-sector job creation.”
But common ground on details remained elusive, as the two sides retreated to their partisan corners, convinced that by sticking to their positions, they’ll continue to strengthen their political bases — and be well-positioned to gain strength in next year’s elections.
“There are some people who believe that the next election will somehow bring about a huge new political alignment that will allow either Republicans or Democrats to get 100 percent of what they want in the way they want it,” said Rep. Chris Van Hollen, D-Md. “It is a dangerous illusion that will put the long-term economic health of our nation at risk.”
Senate Majority Leader Harry Reid, D-Nev., agreed, saying that should the president’s plan falter, “the reason will be very clear, simply partisan politics. They (Republicans) think if they kill every jobs bill and stall every effort to revive the economy, President Obama will lose.”
Obama acknowledged the political prism through which his speech was being viewed.
“But the millions of Americans who are watching right now, they don’t care about politics,” Obama said. “They have real-life concerns. Many have spent months looking for work.
“The people of this country work hard to meet their responsibilities. The question tonight is whether we’ll meet ours.”
Obama didn’t outline how he would pay for the package but promised it “will not add to the deficit.” His advisers said the administration will outline a “dollar for dollar” budget to pay for it.
As part of that pledge, the president promised “a more ambitious deficit plan” that he will release Sept. 19. Obama said that proposal would include measures to trim Medicare and Medicaid, ideas that have been controversial among many Democrats.
The jobs plan was almost $150 billion larger than administration officials had indicated, helping Obama portray the proposal as bold. Economists said a plan of that scope might have a noticeable impact on the economy soon after enactment.
But the size of the proposal also could create sticker shock in Congress, where many GOP lawmakers already were wary of spending money to stimulate the economy.
While Republicans generally favor lower taxes, they prefer to supplement that by revamping the government’s regulatory system instead of passing more piecemeal tax breaks and higher spending.
For its part, the administration hopes Americans will rally behind Obama’s plan and spur Congress to pass enough of the measure to have an effect on the jobless rate, at least by the time the president’s re-election campaign is in full swing.
Mark Zandi, chief economist of Moody’s Analytics, forecast that the jobless rate would fall to roughly 8 percent by late 2012 if Obama’s plan is implemented in its entirety. If no further action is taken, unemployment would remain about 9 percent, he said.
At the heart of the president’s plan is some $245 billion in tax cuts for individuals and businesses, going well beyond the payroll-tax holiday Congress adopted last winter. Obama would expand that cut for workers, providing a $1,500 tax savings to the typical American family that saw a cut of $1,000 in the first round.
Obama also would cut the payroll tax in half for businesses with payrolls of less than $5 million, and declare a complete payroll-tax “holiday” for employers who hire new workers or give wage increases to current employees. All companies would be eligible, but the break would be limited to the first $50 million in new payroll spending.
“Part of the way you increase growth is you increase demand,” said one senior administration official, noting that other elements of the plan create jobs for as little as $30,000 each. “We think this is the right balance of getting money in people’s pockets” and investing directly in job creation, the official said.
The other major chunk of the proposal is $140 billion that would go directly to putting people to work, largely by updating roads, bridges and schools. Some $35 billion of that would go to states to keep teachers, police and firefighters on the job.
The president also proposes overhauling the unemployment-insurance program to prevent 5 million Americans who are looking for work from losing benefits. Officials say his “Bridge to Work” program improves upon a controversial Georgia state program that helps pay displaced workers who do temporary or voluntary work. Obama says his plan would make sure the workers earn minimum wage.
GOP leaders in the House and Senate said Obama’s approach already has failed, and were skeptical his new plan would succeed in putting Americans back to work.
New stimulus spending in particular drew Republican fire. Anticipating that reaction, Obama made an appeal based on American exceptionalism.
“Our highways are clogged with traffic. Our skies are the most congested in the world,” he said. “Building a world-class transportation system is part of what made us an economic superpower. And now we’re going to sit back and watch China build newer airports and faster railroads? At a time when millions of unemployed construction workers could build them right here in America?”