Obama to lay out new jobs plan in address to Congress

McClatchy NewspapersSeptember 7, 2011 

WASHINGTON — With the U.S. jobless rate mired at 9.1 percent, President Barack Obama is expected to call Thursday for extending a payroll tax cut for workers, more help for the unemployed and special tax breaks for those who hire them, as well as creating jobs to repair roads and bridges.

The speech — to be delivered before a joint session of a Congress that has shown little interest in enacting Obama's initiatives — carries huge import for Obama. It comes a week after a dismal August jobs report showed zero job growth and reignited fears that the U.S. economy may be heading for another dive. It also comes as national polls show Obama with the lowest job ratings of his presidency as the 2012 election campaign heats up.

But polls also show abysmally low numbers for Congress and especially for Republicans there, and White House officials said that Obama plans to show a frustrated electorate that he has a plan and is pressing Congress to act on it quickly.

"The American people outside of the Beltway are tired of excuses," White House Press Secretary Jay Carney said Wednesday. "They want action. And there will be no reason that Congress can't act on this unless politics gets in the way."

At least three Republicans — South Carolina Sen. Jim DeMint and Reps. Joe Walsh of Illinois and Paul Broun of Georgia — have told reporters they don't plan to attend Obama's speech.

Broun plans to watch from his office and hold a "twitter town hall" with constituents. Walsh told MSNBC that Obama is "abusing his power" by addressing the joint session.

But there appeared to be no organized GOP boycott. Asked if he believed Republicans should attend, House Majority Leader Eric Cantor, R-Va., said, "The speaker has invited the president and I will be anxiously awaiting his message and will be there." As for a boycott, he added, "I don't think there is much evidence that that is the case."

The president is expected to call for:

_ Extending a payroll tax holiday for all wage earners;

_ Creating an infrastructure bank that would put unemployed construction workers back to work rebuilding aging bridges, roads, schools and airports;

_ And enacting tax incentives for companies that add new employees.

A senior Treasury Department official, briefing reporters on condition of anonymity as a matter of department policy, said Wednesday that Obama's plan also would include help for the long-term unemployed. Almost 43 percent of the 14 million Americans who are officially unemployed have been out of work for more than six months.

Obama is also said to be considering expanding payroll-tax relief for employers, along with programs that would help school districts retain teachers.

The price tag for Obama's proposals was widely reported to be $300 billion, but the White House refused Wednesday to confirm any numbers. Carney insisted, however, that Obama would include measures to pay for the proposal and that it would not contribute to the deficit.

The administration also is thought to be weighing repatriation of corporate earnings from abroad. In 2004, the Bush administration and Congress approved a tax holiday that allowed corporations to bring back money they made abroad and have it taxed at a rate of 5.25 percent instead of the maximum 35 percent rate.

This move is near the top of the wish list for groups such as the U.S. Chamber of Commerce, whose executive vice president, Bruce Josten, argues that it "incentivizes American companies to bring profits back to the U.S. Some of this money will find its way into investment."

How much the move would help is debatable. Much of the repatriated earnings in 2004 were thought to have primarily benefited corporate shareholders, since many big companies bought back stock or issued dividends. Some of that money benefits the economy as new investment capital and spending by the wealthy who own more stock.

Unions have opposed the tax holiday for foreign earnings, in part because the stock benefits flow to chief executive officers who hold vast amounts of their company's stock. Union leaders also believe the lower tax environment abroad contributes to the exodus of jobs from the United States.

Obama's expected call for an infrastructure bank got support from the Associated General Contractors of America, a trade group for builders.

The stakes could not be higher for Obama or the economy. August saw no job growth and government statisticians revised earlier hiring estimates downward. The economy is close to a tipping point where it could slide back into recession. Businesses are neither pulling back nor expanding, but that can't last.

"This is not sustainable. Either confidence stabilizes and businesses start hiring again or they will begin laying off and the economy will slide into recession. Much depends on how policymakers respond," said Mark Zandi, chief economist for forecaster Moody's Analytics.

It's questionable how much Obama can get through a Republican-led House of Representatives that blames the anemic economy on Obama's policies. The House is planning a series of votes to repeal administration regulations it says are hampering private-sector job growth.

House Speaker John Boehner of Ohio and Majority Leader Cantor suggested in a letter to Obama this week that there was room for agreement, but they didn't commit to specifics.

The two reiterated their opposition to stimulus spending, writing that the current unemployment rate and deficit underscore their belief that the nearly $900 billion government spending plan enacted soon after Obama took office in 2009 "was not the best way to improve our economic situation or create sustainable growth in employment."

They said they were not necessarily opposed to an infrastructure bank, suggesting that states could use some of the 10 percent of federal surface-transportation grants that they are required to put aside for transportation museums and programs for pedestrians and bicyclists.

Boehner last week declined Obama's request to deliver his speech on Wednesday night, and his office said Wednesday that Republicans will not deliver an official televised response to the president's speech — a usual staple of presidential addresses.

"We trust in the good judgment of the American people, and the president's proposals will rise or fall on their own merits," said Boehner spokesman Michael Steel.

Analysts suggest that by delivering the speech at the Capitol — rather than the White House — Obama is looking to spread responsibility.

"He wants the visual to include Congress as sharing this problem," said presidential scholar Bruce Buchanan of the University of Texas at Austin.

Obama already has made it clear he'll use Republican opposition as a 2012 re-election campaign tool if the GOP rejects his plans.

"We're going to see if congressional Republicans will put country before party," Obama told a crowd in Detroit on Monday.

The White House plans to waste no time taking its case to the public: Obama is scheduled Friday to deliver remarks at the University of Richmond, two hours south of Washington. Obama carried Virginia in 2008 — the first Democrat to do so since 1964 — but it's expected to be closely contested in 2012.

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