WASHINGTON – In a primetime address to Congress, President Barack Obama proposed a nearly half-trillion dollar economic plan that senior administration officials said will indisputably add to economic growth.
Continue Reading Below
"It will provide a jolt to an economy that has stalled, and give companies confidence that if they invest and hire, there will be customers for their products and services. You should pass this jobs plan right away," said President Obama to Congress.
A senior administration official conceded the presidents proposal is larger than one would have done in April when economic forecasts for next year were far better.
The president requested Congress pass a $447-billion mix of spending and tax cuts to stimulate growth. Administration officials refused to offer economic targets they expect this proposal to accomplish or specific measures the White House plans on proposing to pay for it. The President will, in the coming days, release a detailed plan that will show how we can (ensure the proposal is fully paid for) while achieving the additional deficit reduction necessary, according to a White House press release.
The White House plan proposes increasing and extending the current payroll tax cut for workers from a two-percentage-point cut this year to a 3.1-percentage-point cut for the first $5 million in wages next year. The proposal temporarily eliminates the payroll tax for firms on wages for new and existing worker caps the business. That tax cut applies to the first $50 million in additional payroll.
The payroll tax cut is very elegant& when you cut it (the payroll tax), more money is (immediately) in your pocket, said the official.
Continue Reading Below
The bill would also spend $140 billion dollars on highway construction, school refurbishment, aid to states to keep teachers and first responders employed, expanded high-speed wireless Internet and billions to rehabilitate foreclosed buildings.
For businesses, the White House plan would also extend 100% expensing, which allows companies to claim an immediate tax deduction on their spending on new plants and equipment.
The president also wants another extension of long-term unemployment benefits, while allowing firms to choose work-sharing instead of layoffs, a $4,000 tax credit for workers who have been looking for a job for more than six months and a measure that would make it illegal for a company to refuse to hire a job applicant because they are unemployed.
More than $400 billion of the $447 billion total listed in the White House release is at the very least similar to measures Congress has passed in the past two years. Before the administration released the plan, Senate Minority Leader Mitch McConnell (R-Ky.) said the president's so-called jobs plan is to try those very same policies again and then accuse anyone who doesn't support them this time around of being political or overly partisan, of not doing what's needed in this moment of crisis. This isn't a jobs plan. It's a reelection plan.
Republicans in both houses have threatened their opposition to similar economic ideas, though House Speaker John Boehner offered the president an olive branch for his visit. Im hopeful that after the President gives his speech that well be able to sit down, in a bipartisan way, and find common ground that will help improve our economy, and improve the job picture for the American people, said Boehner.
The president addressed Congress the same day the newly formed Joint Select Committee on Deficit Reduction first convened to begin its mission of cutting at least $1.5 trillion in future deficits over the next ten years. In his speech tonight, the president charged the committee with cutting more than $1.5 trillion to cover the cost of his new jobs proposal and said he will release a "more ambitious" plan one week from Monday to deal with the long-term deficit which will include recommendations on how to cover the new job-creation proposal.
The presidents bill would increase federal deficits mostly next year and the year after, while some spending would bleed into a third year as well, said a senior administration official official. The White House promises the outlined plan will not add to the national debt, with one official saying that offsets, such as tax increases would mostly collect additional revenue. That would likely mean any effort to pay for this that the White House eventually divulges would presumably come later, possibly over a 10-year time frame. That would likely lead to a substantial advance in the date the federal government will hit the recently, and contentiously, raised debt ceiling. To that concern, White House Press Secretary Jay Carney told reporters earlier this week that we're not going to bust the debt ceiling.