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Archive for Friday, September 9, 2011

Cut taxes, Obama tells Congress in jobs plan

September 9, 2011

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— Attacking a deepening jobs crisis, President Barack Obama challenged a reluctant Congress Thursday night to urgently pass a larger-than-expected $450 billion plan to “jolt an economy that has stalled.” He urged lawmakers to slash Social Security taxes for tens of millions of Americans and for almost every business to encourage hiring.

“Stop the political circus,” an animated Obama told a joint session of Congress in a nationally televised speech. Over and over he implored lawmakers to “pass this jobs bill.”

Open to discussion but making no promises, Republican House Speaker John Boehner said Obama’s ideas would be considered but the president should give heed to Republicans’ as well. “It’s my hope that we can work together,” he said.

In announcing a plan heavy on the tax cuts that Republicans traditionally love, Obama sought to achieve multiple goals: offer a plan that could actually get through a deeply divided Congress, speed hiring in a nation where 14 million are out of work, shore up public confidence in his leadership and put Republicans on the spot to take action.

The fate of economy will define Obama’s re-election bid, but he sought to dismiss that element as political fodder that means nothing to hurting Americans.

Obama never estimated how many jobs would be created by his plan, which also includes new federal spending for construction, hiring and an extension of jobless benefits for the long-term unemployed. Despite his promise that it would all be paid for, he has not yet released the details on how.

His message was unmistakable to the point of repetition, as he told Congress more than 15 times in one way or another to act quickly. That was meant as direct challenge by a Democratic president to the Republicans running the House to get behind his plan, especially on tax cuts, or be tarred as standing in the way.

The urgency of the jobs crisis is as pronounced as it’s been since the early days of Obama’s term. Employers added zero jobs last month. A whopping number of Americans — about eight in 10 — think the country is headed in the wrong direction and Obama’s approval ratings are on the decline.

In the House chamber, Obama received a warm response but then the usual political pattern took hold, Republicans often sitting in silence on the applause lines that had Democrats roaring. Boehner had chummy moments with Vice President Joe Biden at his side before the speech but was somber over Obama’s shoulder as the president spoke.

“The people of this country work hard to meet their responsibilities. The question tonight is whether we’ll meet ours,” Obama said. “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.”

The newest and boldest element of Obama’s plan would cut 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.

Obama would also apply the 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 proposed spending to fix schools and roads, hire local teachers and police and 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 as snaring bipartisan support in a time of divided government.

The White House put the price tag of Obama’s plan at $447 billion, with about $253 billion in tax cuts and $194 billion in federal spending.

The president said he would make his case to the public and will waste no time taking his sales pitch on the road. His first stop will be on Friday at the University of Richmond in the Virginia congressional district of House majority Leader Eric Cantor, a frequent critic of the president’s policies.

Politics shadowed every element of Obama’s speech. He appealed to 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.

And the window for action is shrinking before the 2012 presidential election swallows up everything.

Under soaring expectations for results, Obama sought to put himself on the side of voters who he said could not care less about the political consequences of his speech. “The next election if 14 months away,” Obama said, adding that the people who hired every elected leader in the room need help “and they need it now.”

Administration officials bristle whenever critics of their original stimulus plan note that it did not live up to the job creation estimates the White House issued in 2009. As a result, the White House is leaving it to outside economists to render their verdict on the new plan.

Mark Zandi, one of several economists asked by the White House to evaluate the president’s proposal ahead of his speech, said that if enacted it would add 1.9 million jobs and reduce the unemployment rate by one percentage point. Zandi, chief economist for Moody’s Analytics, said the expanded payroll tax cut would be responsible for the most increase in hiring, adding about 750,000 jobs. The tax cut for employers, he said, would add about 300,000 new jobs

As to paying for it, Obama will ask a special debt panel in Congress to find enough savings to cover the costs of his ideas. He says he’ll release specifics a week from Monday along with a proposal to stabilize the country’s long-term debt. Among them: raise taxes on the wealthy, an idea Republicans have already rejected.

Most of the $447 billion package would be spent in 2012. The White House says Obama’s as-yet-unrevealed plan for payment would spread the cost over the long term, likely over 10 years.

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.”

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.

Comments

Jim Phillips 2 years, 7 months ago

You should really come to grips with the fact that there are no "budget cuts" coming. The only thing that is being done is reducing the amount of projected increases over the next ten years. The "budget cut" terminology is a sham and a scam perpetrated by the government on the people and has been for years.

Example: You go in and ask your boss for a 10% raise. He gives you a 7.5% raise. Can you actually say you had to cut your budget by 2.5% after having a 7.5% increase in funding? Give me a break! "Budget Cuts" are nothing but politicospeech.

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Richard Payton 2 years, 7 months ago

Wouldn't the President's suggested policy of hiring the long term unemployed so a business owner could receive a favor be discriminatory. Would this new suggested policy allow the human resource person to ask, "How long have you been out of work"?

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jayhawklawrence 2 years, 7 months ago

It is difficult to determine exactly how much value our economy lost because of Eric Cantor and the Tea Party strategy of pushing the US to near default and a subsequent credit downgrade because the damage is still being accrued and it is very difficult to measure.

Therefore, it is hard for me to watch this pompous and arrogant ignoramus give us lectures on economics after watching what he did during the debt crisis and watching the Republican Party thugs chew up the economy and transfer American wealth into the banks and largest corporations during the Bush fiasco we are still suffering from.

What the President is asking for they should just give him so we can at least give Obama a decent chance to improve the economy. Why not?

I believe the American people would like to give the President one decent shot at it and then if it doesn't work, we will be a more educated electorate at the next elections.

But that isn't what this crowd is looking for is it.

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rockchalk1977 2 years, 7 months ago

Great article today by Victor Davis Hanson (National Review Online). Mr. Hanson opines that President Downgrade Obama is calling for another $500 billion in government borrowing to jump start temporary job creation. President Zero Jobs already oversaw a failed $800 billion stimulus, “shovel-ready” jobs that were later admitted to be not so shovel-ready, “millions of green jobs” talk leading to sweetheart loans to now-bankrupt crony companies, nearly $5 trillion in new borrowing, and massive new financial and environmental regulations. Been there, done that, got the tee shirt.

Mr. Hanson concludes with the question, is Obama just politically dense, or is he so inured to the Chicago union thug mentality that he knows no politics other than polarization, even when appealing for help? We already know the answer.

http://www.nationalreview.com/corner/276732/stale-speech-victor-davis-hanson

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Flap Doodle 2 years, 7 months ago

In jobs news that is being pretty much ignored by the national media: "LONGVIEW, Wash. (AP) — Hundreds of Longshoremen stormed the Port of Longview early Thursday, overpowered and held security guards, damaged railroad cars, and dumped grain that is the center of a labor dispute, said Longview Police Chief Jim Duscha. Six guards were held hostage for a couple of hours after 500 or more Longshoremen broke down gates about 4:30 a.m. and smashed windows in the guard shack, he said. No one was hurt, and nobody has been arrested. Most of the protesters returned to their union hall after cutting brake lines and spilling grain from car at the EGT terminal, Duscha said. The International Longshore and Warehouse Union believes it has the right to work at the facility, but the company has hired a contractor that's staffing a workforce of other union laborers. Thursday's violence was first reported by Kelso radio station KLOG. Police from several agencies in southwest Washington, the Washington State Patrol and Burlington Northern Santa Fe responded to the violence to secure the scene that followed a demonstration Wednesday. "We're not surprised," Duscha said. "A lot of the protesters were telling us this in only the start." One sergeant was threatened with baseball bats and retreated, Duscha said. "One officer with hundreds of Longshoremen? He used the better part of discretion."..." http://news.yahoo.com/longshoremen-storm-wash-state-port-damage-rr-144921214.html They're only following Hoffa's suggestions. WH is remarkably silent on the issue.

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jayhawklawrence 2 years, 7 months ago

So today we hear the predictable responses by Republican leaders such as Cantor and Paul Ryan.

If you look at Ryan's background you will find that he was a speech writer for Jack Kemp and his political background is very tied to that group that believed the way to fix every problem was to cut taxes.

In my view, this group was the evil child of the Reagan presidency. They more than anyone else have screwed up the economy and they are the ones who influenced the economic policies of the Bush administration such as the Bush tax cuts.

Instead of understanding the damage that the Bush policies did to this country, nearly destroying our economy, they began from day one to try to destroy the Obama presidency.

These people are simply evil.

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imastinker 2 years, 7 months ago

What an idiot. Obama still believes that bigger government is the answer to why businesses won't hire. Businesses are afraid of changing regulatory rules that require a business to adapt to another process or way of doing business. Five years ago it was rare for a small project to get hung up by EPA and delayed indefinitely, now it's the rule. Sometimes EPA compliance and approval take as long and cost as much as the entire rest of the project.

Look at the Sunflower power plant. The rules that prevent them from expanding weren't even written when it was turned down.

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cato_the_elder 2 years, 7 months ago

No, Bozo. "[t]he policies that got us into this mess in the first place" (your words) were government housing policies favored by liberal Democrats starting in 1979 and still favored by Obama, who before the subprime loan bubble was the third-leading recipient of Freddie and Fannie money despite having served only part of one Senate term.

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TheBellTolls 2 years, 7 months ago

Tax cuts, big government solutions, debt spending. Obama is Bush’s third term.

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ibroke 2 years, 7 months ago

I am glad to see this newly elected president is starting off by offering plans to create jobs , lets give him a chance on his first day in office,,,, good job Obama!

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cato_the_elder 2 years, 7 months ago

"Cut taxes, Obama tells Congress in jobs plan."

What a ridiculous headline. While the cost of what Obama has now proposed hasn't yet been scored by the CBO, we're clearly talking about at least another $300 billion in spending, with a few as yet undefined "tax cuts" up for negotiation.

The headline should have read, "Spend $300 billion more, Obama tells Congress in jobs plan."

One thing is clear about Obama: If it hasn't worked, dress it up and try it again, throw it against the wall, and toss in more class warfare for good measure. It worked for him in 2008, and last night's speech was simply more of the same.

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jaywalker 2 years, 7 months ago

See? Even when the President capitulates and offers up the Republican golden calf - massive tax cuts - they sit on their stodgy asses with the pre-determined "strategy" that anything he might say won't be what they want/like/can or will get behind. It's apparently preferable that the country spin down the drain as long as they get the White House. Soooo freakin' sick of this shinola. Watching that display last night was embarrassing and beyond aggravating. I wished I was a fly on the wall with an air gun, able to peg each and every one of those morons in their fat arse each time they sat on their hands.

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Kontum1972 2 years, 7 months ago

Mika Breshenski is way too hott....

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Kontum1972 2 years, 7 months ago

we need to "nuke" ourselves......and start over.... i gotta go take a stimulus...brb....

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just_another_bozo_on_this_bus 2 years, 7 months ago

How to put America back to work

By JOSEPH E. STIGLITZ

Excerpt--

"Are we doomed to an extended period of Japanese-style malaise — until the excess leverage and real capacity works its way out? The answer, I have suggested, is a resounding “no.” More accurately: This outcome is not inevitable.

First, we must dispose two myths. One is that reducing the deficit will restore the economy. You don’t create jobs and growth by firing workers and cutting spending. The reason that firms with access to capital are not investing and hiring is that there is insufficient demand for their products. Weakening demand — what austerity means — only discourages investment and hiring.

As Paul Krugman emphasizes, there is no “confidence fairy” that magically inspires investors once they see the deficit go down. We’ve tried that experiment — over and over. Using the austerity formula, then-President Herbert Hoover converted the stock market crash into the Great Depression. I saw firsthand how the International Monetary Fund’s imposed austerity on East Asian countries converted downturns into recessions and recessions into depressions.

I don’t understand why, with such strong evidence, any country would impose this on itself. Even the IMF now recognizes you need fiscal support.

The second myth is that the stimulus didn’t work. The purported evidence for this belief is simple: Unemployment peaked at 10 percent — and is still more than 9 percent. (More accurate measures put the number far higher.) The administration had announced, however, that with the stimulus, it would reach only 8 percent.

The administration did make one big error, which I pointed out in my book “Freefall” — it vastly underestimated the severity of the crisis it inherited.

Without the stimulus, however, unemployment would have peaked at more than 12 percent. There is no doubt that the stimulus could have been better designed. But it did bring unemployment down significantly from what it otherwise would have been. The stimulus worked. It was just not big enough, and it didn’t last long enough: The administration underestimated the crisis’s durability as well as its depth."

http://www.politico.com/news/stories/0911/62847.html#ixzz1XSQiBfan

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Eybea Opiner 2 years, 7 months ago

I have an idea. Instead of just raising taxes on the wealthy, why don't we confiscate the entire net worth of the 400 richest Americans. That will garner about $1.3 trillion----just about enough to offset this year's spending deficit. Of course that won't help the debt, nor next year's deficit.

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