NEWS

Obama pitches $447B jobs plan to boost economy

09/08/2011 09:07 EDT | Updated 11/08/2011 05:12 EST

U.S. President Barack Obama went before a fractious U.S. Congress on Thursday to unveil a $447-billion plan to jump-start a foundering American economy.

Facing a jobless rate of 9.1 per cent and widespread discontent with his leadership, Obama proposed an ambitious package that calls for dramatic cuts in the payroll taxes that taxpayers and businesses pay to fund the U.S. Social Security pension program.

The president insisted his jobs plan could be accomplished without pushing the U.S. further into debt.

"This plan is the right thing to do right now," Obama told legislators on Capitol Hill. "You should pass it. And I intend to take that message to every corner of this country."

But selling that message to a bitterly partisan Congress could be very difficult. Republicans, who control the House of Representatives, are opposed to many of Obama's ideas to jolt the economy. They are also reluctant to go along with a plan that could help him get re-elected next year.

Every time Obama urged Congress to "pass the bill," Democrats cheered and Republicans sat silently.

Facing such an uphill battle, the president tried to show voters that if his package doesn't end up making it through Congress, they shouldn't blame him. In his speech, Obama took direct aim at the political stalemate that has hamstrung his administration during some previous attempts to arrive at solutions to the country's formidable unemployment and deficit problems.

"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.

But some parts of the Obama package are re-worked versions of proposals Republicans had wanted no part of before — things like closing corporate tax loopholes and increasing taxes on wealthier Americans.

The payroll tax cuts included in Obama's package account for the majority of the total jobs plan — about $240 billion of the $447 billion.

In addition, the package also includes:

- $105 billion in public works spending to modernize schools and improve roads and bridges.

- $49 billion to continue unemployment assistance to millions of Americans who are receiving extended benefits.

- $35 billion in local government aid to avoid layoffs of emergency personnel and teachers.

- $8 billion to fund a $4,000 tax credit for businesses that hire workers who have been out of work for more than six months.

Obama said the payroll tax cut alone 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's sway over 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."

About 14 million people are currently unemployed in the U.S. On average, there is just one job opening available for every four job seekers.

Nearly 80 per cent 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 bitter disgust with Washington's political infighting.

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

White House officials said Obama would formally send his plan — called The American Jobs Act — to Congress next week.

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