Obama unveils his American Jobs Act
For those of you transfixed by the Packers game, there was another must see television event Thursday – President Barack Obama’s address on the failing economy.
Obama set expectations high for this speech, promising he would present a plan that would jump-start the stagnant economy. He hopes the plan will decrease the growing national unemployment rate, and avoid a double-dip recession. He needs this to be effective: his approval ratings have fallen to 42 percent.
But after details of the American Jobs Act started to leak out and hearing Obama speak, this reporter heard nothing new.
“The purpose of the American Jobs Act is simple: to put more people back to work and more money in the pockets of those who are working,” Obama said. “It will create more jobs for construction workers, more jobs for teachers, more jobs for veterans, and more jobs for the long-term unemployed. It will provide a tax break for companies who hire new workers, and it will cut payroll taxes in half for every working American and every small business. 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.”
Specifically, Obama is seeking a jobs bill that will give businesses a $4,000 tax credit if they hire new workers from the ranks of the long-term unemployed. He also wants to cut small business payroll taxes in half. Other highlights include:
- Providing money to repair and modernize schools, highways, bridges and airports. It would set up a fund to use private donations and issue loans for construction projects, with reforms to eliminate earmarks.
- Funding the return of up to 2,500 teachers to the classroom to counter nationwide layoffs – at least for another year.
- It would also give tax credits to businesses that hire veterans, some of whom have higher rates of joblessness. Post -9/11, veterans rate of unemployment was 10.9 percent in April, while the overall unemployment rates is rate is 8.5 percent.
- This act would put $1,500 more into the typical American working family’s pocket by extending the 2 percent reduction in Social Security withholding for another year.
The proposed bill contains almost $450 billion in new spending and tax cuts aimed at jolting the economy back to health.
The plan outlined in last night’s speech sounds a lot like the American Recovery and Reinvestment Act of 2009, which Obama and the then-Democratic controlled Congress passed during his first month in office.
Back in late January and early February of 2009, Obama had an approval rating of 69 percent and unemployment was at a seasonally-adjusted 7.7 percent. He promised that his stimulus plan would keep unemployment below 8 percent and jump start the economy. It did bump sales of cars and homes with programs like “Cash for Clunkers” and the “First Time Home Buyer Credit.” When those programs ended, both the housing and auto markets fell back into their previous slumps, though the U.S. auto industry is now arguably in the best financial shape it’s seen in decades.
And we have all seen where the unemployment rates have gone – as high at 10.1 percent in Oct. 2010 and continuing to hover over 9 percent, with an unknown percentage of people who have simply given up trying to find work.
At the podium last night, Obama once again asked for bi-partisan support of this plan, saying it includes everything both Democrats and Republicans have been demanding.
He even wore a purple necktie, the color of bi-partisanship, and talked up a program in Georgia that Republicans have highlighted, which provides temporary work to those receiving unemployment benefits.
“There should be nothing controversial about this piece of legislation. Everything in here is the kind of proposal that’s been supported by both Democrats and Republicans – including many who sit here tonight. And everything in this bill will be paid for. Everything.”
His plan for paying off a $450 billion bill? Obama referred to the $1 trillion in cuts made in July during the debt-ceiling debate and the plan for $1.5 trillion in additional cuts by Christmas.
And he suggested that Congress make “modest adjustments” to Medicare and Medicaid and called for tax code reform.
Obama knows he will have to sell both those suggestions – Democrats are loathe to make “adjustments” to social programs as much as Republicans are not naturally inclined to increase taxes.
“But here’s the truth,” Obama stated, addressing his fellow Democrats. “Millions of Americans rely on Medicare in their retirement. And millions more will do so in the future. They pay for this benefit during their working years. They earn it. But with an aging population and rising health care costs, we are spending too fast to sustain the program. And if we don’t gradually reform the system while protecting current beneficiaries, it won’t be there when future retirees need it. We have to reform Medicare to strengthen it.”
He made a similar pitch to the GOP. “Here is what every American knows. While most people in this country struggle to make ends meet, a few of the most affluent citizens and corporations enjoy tax breaks and loopholes that nobody else gets. Right now, Warren Buffet pays a lower tax rate than his secretary – an outrage he has asked us to fix. We need a tax code where everyone gets a fair shake, and everybody pays their fair share. And I believe the vast majority of wealthy Americans and CEOs are willing to do just that, if it helps the economy grow and gets our fiscal house in order.”
Obama also responded to Republican criticism of regulations, saying he agreed there are rules and mandates that are burdensome to business. He pledged to continue his administration’s review of all government regulations and noted that over 500 areas of reform have been found.
“We should have not more regulation than the health, safety and security of the American people require. Every rule should meet that common sense test. But what we can’t do – what I won’t do – is let this economic crisis be used as an excuse to wipe out the basic protections that Americans have counted on. I reject the argument that says for the economy to grow, we have to roll back protections. I reject the idea that we have to strip away collective bargaining rights to compete in a global economy.”
He continued to tug at Republicans hearts, calling on the memory of Abraham Lincoln, reminding politicians that he mobilized the government to build the Transcontinental Railroad, launched the National Academy of Science and set up the first land grant colleges. He called on both sides to imagine what America would be now if our earlier leaders had not built highways, bridges and airports, or supported the basic research that led to the Internet.
“No single individual built America on their own. We built it together. A nation with responsibilities to ourselves and with responsibilities to one another. Members of Congress, it is time for us to meet our responsibilities.”
And he ended with a call to pass his bill.
“I don’t pretend that this plan will solve all our problems,” he said. “Ultimately, our recovery will not be driven by Washington, but by our businesses and our workers. But we can help. We can make a difference. There are steps we can take right now to improve people’s lives.”
“But know this: the next election is fourteen months away. And the people who sent us here – the people who hired us to work for them – they don’t have the luxury of waiting fourteen months. Some of them are living week to week; paycheck to paycheck; even day to day. They need help, and they need it now.”