WASHINGTON – The jobs package that President Barack Obama plans to unveil shortly after Labor Day could include tens of billions of dollars to renovate thousands of dilapidated public schools and a tax break to encourage businesses to hire new workers, according to people familiar with White House deliberations.
As aides work to put together the proposal, they are also hammering out a companion plan to reduce federal budget deficits over the next decade, which Obama would share with the 12-member congressional super committee charged with finding long-term fixes for the growing national debt.
The deficit-reduction plan would rely on some of the ideas Obama worked on in private negotiations with House Speaker John Boehner, R-Ohio, during the summer, aides said.
The two-phase plan will require Obama to argue for spending more money in the short term while reducing the federal deficit over a longer period. Many economists support that combination, saying that cuts in spending should wait until the economy is stronger. But political strategists say it has been difficult to communicate that idea to voters.
Obama pushed the idea Wednesday during a stop in Alpha, Ill. “Yes, some of these things cost money,” he said. “The way we pay for it is by doing more on deficit reduction.”
Obama promised during his three-day bus tour of rural towns in the Midwest that he would present a jobs plan when Congress returns from its August hiatus. In doing so, he adopted a more combative tone than he generally showed during the weeks of debate this summer over raising the national debt limit. At every stop on the tour, the president issued a challenge to Republicans: Work together on a bipartisan effort to expand U.S. employment or take the blame for blocking efforts to improve the economy.
“What is needed is action by Congress. It’s time for the games to stop. It’s time to put country first,” he said at a stop in Cannon Falls, Minn. And in Peosta, Iowa, after outlining measures he’s already proposed, Obama said, “We could do even more if Congress is willing to get in the game.”
Obama’s tone may reflect lessons learned in the debt ceiling fight. Many Democrats felt he made a mistake in seeking a deal with Republican adversaries who were determined not to give him one. In the coming months, aides said, Obama still plans to push for bipartisan support. But, they said, if Republicans don’t go along, he will take his case to voters, rather than again become bogged down in protracted negotiations.
“He’ll take the case to the public about what they are stopping – and why,” said one senior administration official.
The elements of Obama’s plan remain under debate. But backers of the school renovation plan and the tax credit for hiring new workers think the proposals could attract Republican support. At the same time, they think that if the debate becomes a public confrontation, the ideas would give Obama the upper hand in a battle for voters.
“I like the optics of it,” said Jared Bernstein, a former administration economics adviser and a proponent of the school rehab program. “It’s the public school in your community, not a bunch of folks on a distant highway.”
Supporters estimate that each $1 billion in school construction work would generate up to 10,000 jobs. A $50 billion program, for example, would underwrite half a million jobs by that calculation.
The average U.S. school building is 40 years old, and many are suffering from neglect – poor ventilation, energy inefficiencies and mold. A report by the American Society of Civil Engineers in 2009 gave a grade of “D” to the nation’s public school facilities.
The proposal for a tax break for new hires would come in the form of a new tax credit based on the change in employment from the beginning of the year to the end. A business that expanded its payroll from 100 to 102 workers, for example, would get a tax credit for the two new employees.
Obama has been under mounting pressure to take stronger steps to curb unemployment. So far, the White House has put out a series of proposals – trade deals, a patent overhaul and a modest amount of public works spending – that have failed to spark much enthusiasm.
“If it’s more of the same,” one Democratic senator said of the patent proposal, “that’s not a jobs bill.”
Obama’s sharp rhetoric on the bus tour has raised expectations that he will announce a plan that his team believes will make a difference, even if the proposal squarely confronts Republican opposition to virtually any new government spending.
Some voters would relish a feistier president. Larry Eckhardt, 54, showed up for Obama’s town hall event on Wednesday in Atkinson, Ill. “There’s an old saying, ‘You can’t fix stupid.’ He’s gotta learn that,” Eckhardt said. Republicans “are on an entirely different page,” he said.