Spokane7
65°
September 8, 2011 in Nation/World
Obama asks $450 billion to lift economy
WASHINGTON — Confronting an economy in peril, President Barack Obama unveiled a larger-than-expected $450 billion plan tonight to boost jobs and put cash in the pockets of dispirited Americans, urging Republican skeptics to embrace an approach heavy on the tax cuts they traditionally love. With millions of voters watching and skeptical of Washington, Obama repeatedly challenged Congress to act swiftly.
The newest and boldest element of Obama’s plan would slash 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.
“This plan is the right thing to do right now,” Obama said after a divided body rose in warm unison to greet him. “You should pass it. And I intend to take that message to every corner of this country.”
In his televised address to Congress, Obama sought to provide a jolt for the economy, still staggering on his watch, and for his own standing at one of the lowest marks of his presidency. He put forth a jobs plan that he hopes can get bipartisan support and spur hiring in a nation where 14 million people remain out of work and the jobless rate is stuck at 9.1 percent. Public confidence in his stewardship of the economy is eroding.
Obama did not venture an estimate as to how many jobs his plan would create. He promised repeatedly that his plan would be paid for, but never said how, pledging to release those details soon.
The president also would apply the Social Security 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 also proposed spending to fix schools and roads, hire local teachers and police and to 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 at winning bipartisan support in a time of divided government.
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 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,” Obama said.
His aim Thursday night was to put pressure on Congress to act — and to share the responsibility for fixing the economic mess that is sure to figure in next year’s elections. For every time he told lawmakers to “pass the bill” — and he said over and over — Democrats cheered while Republicans sat in silence.
Tax cuts amounted to the broadest part of Obama’s proposal — in essence, a challenge by the Democratic president to congressional Republicans to get behind him on one of their own cherished economic principles or risk the wrath of voters for inaction. The tax cuts alone would amount to roughly $250 billion.
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.”
Politics shadowed every element of Obama’s speech. He implored 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 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.
In one striking sign of discontent, nearly 80 percent 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 disgust with Washington infighting.
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.
A key part of Obama’s approach was to appeal to the lawmakers in front of him to pass a deal, and to position them for blame for inaction should the jobs plan fall short.
“The next election is 14 months away,” he said. “And the people who sent us here — the people who hired us to work for them — they don’t have the luxury of waiting 14 months. … They need help, and they need it now.”
Stocks plummet as outlook in Europe dims 
johnclarke on September 08 at 4:55 p.m.
Oh my, now the GOP will be against tax cuts. Crap, what will thye run on now ?
johnclarke on September 08 at 4:55 p.m.
THEY !
I got excited and typed a boo boo.
JBlim on September 08 at 4:55 p.m.
It’s hard to believe that the American Jobs Act would have trouble passing congress, unless you factor in the petty, Anti-averageAmericans, anti-Obama-because-he’s-not-a-Republican factor. Great speech. The Republicans will pay for not supporting it, IMHO.
steptoe_fan on September 08 at 5:24 p.m.
So how’s that job creation going, Prez ?
Solyndra solar in CA
The company was held up as the model for government investment in green technology. In addition to the $535 million loan guarantee, it received visits from the president and other state and federal officials.
It filed bankruptcy amid hard times in the nation’s solar industry. The price for solar panels has tanked, in part because of heavy competition from Chinese companies, dropping by about 42 percent this year.
dataxman on September 08 at 5:25 p.m.
As soon as Obama sends the bill over to the House, with the detailed plan on how to pay for it - he did promise it would be fully paid for - the Republicans should pass it.
Diana on September 08 at 5:28 p.m.
Knocked it out of the park!
Obama 2012
Bluesnag on September 08 at 5:39 p.m.
Obama is an incompetent Marxist who does not believe in American exceptionalism. Perhaps he should stop Michelle’s $10 million vacation budget from going through next year, and cut back on the Martha’s Vineyard vacations. He is fiddling while “Rome” is burning. The only thing I haven’t heard Obama say is “Alihu Akbar.”
Pigrobin on September 08 at 5:39 p.m.
I understand cutting the payroll tax will put more money in our pockets and in theory, will help the economy. However, it sure seems to be the ultimate example of robbing Peter (social security) to pay Paul (the worker for one year). Someone needs to show me how this will create enough jobs to pay for itself. It will require a lot of jobs to back fill this loss. If it fails, it just means we put social security into an even more precarious position. You workers might consider having that additional cash in your pocket go straight to your 401K/403B/IRA and protect yourself.
detroitdude on September 08 at 5:42 p.m.
He’s trying to do SOMETHING, unlike the GOP and Tea Party.
Squid on September 08 at 5:45 p.m.
Businesses start or expand when they are confident that they have something people will buy. Hiring incentives do not create buyers. Unless you have buyers, you can’t hire. The economy problem is because no one is buying anything. No one is spending money.
Did anyone do the math on this? If you make $2000 per month, you will have an extra $62 per month, ($744 per year) in your paycheck. Gonna be years before this helps, since most have borrowed to keep from drowning. Too little, too late, no way to pay for it or any of the other stimuli. We will be forced to have huge tax increases.
I fear for our future generations…. And mine too.
liberal_in_right_wing_land on September 08 at 5:48 p.m.
Nice to see Obama finally growing a backbone and standing and talking for something…..lets see if he backs this up or caves yet again.
The republicans really have no reason not to pass this bill, but of course they wont. I actually wish he went bigger since nothing he brings will ever get passed by the tea party republican House of Representatives.
Oh well, and we thought the debt ceiling debate was a pathetic and disgusting display by our lawmakers….we haven’t seen nothing yet.
LET THE PETTY GAMES BEGIN AGAIN!
Squid on September 08 at 5:52 p.m.
An extra $15.50 per week in your paycheck, if you make $2000 per month.
An extra $7.75 per week in your paycheck, if you make $1000 per month.
You could get those results, if you could figure out why gas is so expensive, even though the price per barrel is very low. Must be Cheney, right? He’s long gone, and busy making a living, on a book tour.
misjustice on September 08 at 5:56 p.m.
I like the infrastructure bank thingy…
Don’t worry, the Tea O’Cons won’t budge and the economy will continue to worsen; and then they will sweep into power with a clear victory and a mandate to, well, errr, hmmm, well…errr, or so they think.
The Newtster got a taste of voter back lash, back when he was the Speaker of the House, when he shut down the gubmint. Maybe it’s time for a flashback?
Just sayin’…
: 0
Pigrobin on September 08 at 5:56 p.m.
If the republicans are all about getting rid of Obama at all costs, they should pass this plan without even an inaudible “you lie.” The only thing the current president can gain politically is if the R’s don’t let it pass. Whether the plan works or fails in the long run, does anyone really believe his plan is going to turn things around before it’s time to vote?
Scoutster on September 08 at 6:00 p.m.
This is what we hired him for.
hunternomore on September 08 at 6:00 p.m.
So “squid” what was your idea again to bring America back from the brink? I’m sorry, the silence is deafening. What did you say? We can’t hear you–––––-
Bluesnag on September 08 at 6:01 p.m.
detroitdude
“He’s trying to do SOMETHING, unlike the GOP and Tea Party”
Are you kidding?!? The GOP and Tea Party are trying to stop this Marxist from pushing his bogus healthcare plan, his radicalism that calls for Israel to go back to its 1967 indefensible borders, and “redistributing the wealth.” I can’t believe how apparently the public school system, the entertainment industry, and the news media have made socialism and radical Marxism, with Kenesian economics acceptable. Obama gave no clue as to how to pay for this “jobs plan,” except of course, tax the “rich’, otherwise known as the people that Obama hangs out with at Martha’s Vineyard.
DHF on September 08 at 6:06 p.m.
All this FLUFF and it will take two weeks to tell the people how it will be paid for. When he talked about products Made in USA I could not help but see who was sitting in the Presidential box with his wife GE Jeffery Immelt who loves to give all the jobs to CHINA. And a big contributor to his campaign. It’s all BS and pandering for the vote. The American people are not that stupid as to see through this charade.
Albert on September 08 at 6:10 p.m.
yawn….
gmorton on September 08 at 6:12 p.m.
Pigrobin wrote,
“I understand cutting the payroll tax will put more money in our pockets and in theory, will help the economy. However, it sure seems to be the ultimate example of robbing Peter (social security) to pay Paul (the worker for one year). Someone needs to show me how this will create enough jobs to pay for itself. It will require a lot of jobs to back fill this loss.”
It will be interesting to see how Obama proposes to “pay for” these temporary tax cuts and more handouts to public employee unions.
It appears to be a replay of the 2008 stimulus scheme, and we know how well that worked. As in 2008, it does not even address the real problems with the economy.
The Repubs should pass these bills exactly as Obama submits them, and at the same time predict that they will not work and explain why. As that prediction comes true It will assure Obama’s defeat in 2012.
Diana on September 08 at 6:19 p.m.
Waaahhh! Somebody doesn’t want the President to go to Martha’s Vineyard!
B-b-but, Obama! Waaahhh!
gmorton on September 08 at 6:22 p.m.
Isaid above,
“The Repubs should pass these bills exactly as Obama submits them . . .”
Unless, of course, he plans to pay for them with more class-warfare-inspired tax increases.
johnclarke on September 08 at 6:29 p.m.
Minor problem with your er…statement Gmorton, the stimulus did work… see below. Unfortunately, with record profits and increased productivity numbers, corporations are choosing to sit on huge cash reserves because they are “unsure” about what’s going to happen. If they are concerned about regulations, maybe they should think again, because Obama is repealing them left and right. The government can’t sustain the economy forever, at some point the “free market” is going to have to stop squeezing the middle class and start investing and hiring. All the normal excuses no longer hold water, because that is all they are - excuses.
http://content.usatoday.com/communities/theoval/post/2011/08/obama-erase-regulations-save-10-billion/1
“Specifically, the plan increased the number of people employed by between 1.2 million and 3.3 million, and lowered the unemployment rate by between 0.6 and 1.8 percentage points in the first quarter of 2011, The Wall Street Journal reports, citing CBO data.
It also raised gross domestic product (GDP) by up to 3.1 percent in the same period.
The stimulus package had its biggest impact in 2010, boosting GDP by as much as 4.6 percent in the second quarter of that year, while increasing employment by 1.4 million to 3.6 million in the third quarter.
Squid on September 08 at 6:30 p.m.
Hunter, I’m not president of this pit, so fortunately I don’t have to worry about it. I have some ideas, but I have no idea if they would work or not.
My thoughts are to stimulate small business, by making easy to get, low interest loans to start or expand. Get rid of the Government hurdles they face, such as excessive insurance requirements. Stimulating big business primarily creates minimum wage jobs, so I’m against that.
Downsize Government. Stop wasteful spending on agencies that do nothing, but watch porn all day. Run the Government more efficiently.
Government loans to improve your home, if you have equity.
Reduce legal and illegal immigrant costs.
Actual real live regulation of utility companies.
Figure out why gas prices are so high, when the price per barrel is so low. Regulate and cap it.
Quit the harsh regulations to drill for oil or mine for minerals. Regulations are a huge factor in the cost of fuel and natural gas.
Actual regulation for insurance companies.
I am against big government, but when the Government requires you to buy something to operate, it should be regulated, and regulated correctly and fairly.
I’m done. That’s all I got for now.
Squid on September 08 at 6:34 p.m.
Oh, and independent audits of every and all Government agencies. The real ones that actually produce results.
jddavis on September 08 at 6:43 p.m.
MisJ—Knocked out of Park and now headed further into the ditch!
:>)
westerly on September 08 at 6:53 p.m.
ummmm..factories in Spokane should start hiring thousands of workers, even though their products are not selling. The new workers don’t have anything to do..no product selling, so don’t need more workers..logic. But company gets a Obama rebate…ummm so company have to pay these new workers health care, taxes ah nauseam….but it looks good. How do the companies pay the new workers they hired to get rebates?? No goods produced and sold mean no money for wages…another year of Obama…good ridance.
AnalyzeThat on September 08 at 7:01 p.m.
Obama needs to come up with a fresh idea. If he’s going to give money away, the everyday citizen needs something more than a few extra dollars in their paycheck, especially when it takes away from the number one social program in this country.
I think he should skip all the proposed ideas and just give every household in the US that filed a tax return last year a lump sum of money like $100,000. I can guarantee that people would be out buying and spending like there was no tomorrow!
The_Seer on September 08 at 7:14 p.m.
On rare occasions gmorton and I agree. This is one of them. The plan does nothing to address the massive structural problems with the U.S. economy. Short-term fixes to increase demand won’t correct a massive trade imbalance, especially if the demand is “paid” for by further defunding of Social Security.
I think it is shortsighted, however, to note that lowering the payroll tax won’t have that large of an impact. Sure. another eight bucks a week to someone making a grand a month isn’t much, but for employers, who must match that amount, it can add up quickly. The rub is whether or not employers use that restored income to expand when demand isn’t really there to support it.
Hiker on September 08 at 7:15 p.m.
AnalyzeThat: Your plan would definitely have people spending money. It would be a tad expensive though.
The census office says there are 78,000,000 households in the US. Assuming 80% of them filed a tax return, your stimulus program would cost $6.24 trillion.
misjustice on September 08 at 7:24 p.m.
I dunno, maybe we DO need more tax cuts for rich folks. I work in luxury sales, and we are doin’ fine, thank you very much. In fact, sales are up, up, up. So maybe tax cuts for the rich ARE the answer!
At this rate (as long as the rich folks keep buyin’ what we are sellin’), with my incentives and bonuses, in addition to my base salary, I will soon be one of the rich; and I don’t wanna pay taxes anymore. I want more than some whimpy payroll deduction reduction; I don’t want to pay ANY taxes…
I wanna have the same rate as GE…somebody hook me up!
Where’s my (bigger) tax cut?
Bigger is better!
: 0
@ analyzethat; I’d spend that money faster than Marcus Bachmann can say “barbarians”, (which is pretty darn fast) I’d use my 100K as a down payment on property in Oregon. On the coast…just a small shack mind you, nothing too pretentious. A place to escape to when the SPD starts killin’ citizens again…
Where’s my (bigger) tax cut?
: 0
Squid on September 08 at 7:26 p.m.
The Chinese are suckers. Let’s get the 6.24 Trill from them.
What comes after trillion? Better figure it out, since I had no idea what came after a billion a few years ago.
Diana on September 08 at 7:29 p.m.
Okay, so what’s the Republican jobs plan?
johnclarke on September 08 at 7:45 p.m.
Diana, where have you been the last 12 years ? It’s tax cuts !
jddavis on September 08 at 7:46 p.m.
Pretty sure the Republican plan doesn’t include extending UI…
gmorton on September 08 at 9:52 p.m.
Squid wrote,
” * stimulate small business, by making easy to get, low interest loans to start or expand . . .
” * Government loans to improve your home . . .
” * Actual regulation for insurance companies . . .”
But then,
“I am against big government … ”
Except when you’re not.
gmorton on September 08 at 9:57 p.m.
johnclarke wrote,
” … the stimulus did work… see below.”
That must be why unemployment is still >9%, GDP growth for the 1st half of 2011 was <1%, and deficits for the year will be >$1.3 trillion.
Squid on September 08 at 10:11 p.m.
“I am against big government, BUT when the Government requires you to buy something to operate, it should be regulated, and regulated correctly and fairly.”
gmorton on September 08 at 10:18 p.m.
Diana wrote,
“Okay, so what’s the Republican jobs plan?”
I’ll take that question as serious, rather than rhetorical. I hesitate to speak for Repubs, however, so here is a rational “jobs plan.”
First you have to understand where jobs come from. Jobs are created when employers believe they can sell the products those workers would make at a profit. Whether they can make a profit depends upon their costs to make the product vs. the price that product currently commands in the market. If costs exceed the market price, the business will not make the product.
For most businesses and products, the major costs are materials, labor, and overhead. One of the major components of overhead is the cost of government, which includes taxes, costs of complying with regulations, including regulations which raise labor costs, and inflation. If those costs in the US exceed their totals in other countries, then the products for which that is true will not be made in the US, and hence no jobs in the US making them.
A rational “jobs plan,” therefore, is any plan which reduces the costs of making products in the US.
JBlim on September 08 at 10:21 p.m.
gmorton, you know better than that. Obviously, that “unemployment is still >9%” is meaningless because it doesn’t compare that with what the unemployment rate would have been without the stimulus. Bush had us to the brink of a depression and a worldwide financial calamity. Panicky Hank Paulson showed us the first version of the massive bailout. We almost certainly would have gone into full scale depression had teabagger nutbags been in power. The lost tax revenues to the government would have been enormous.
gmorton on September 09 at 9:43 a.m.
JBlim wrote,
“Obviously, that ‘unemployment is still >9%’ is meaningless because it doesn’t compare that with what the unemployment rate would have been without the stimulus.”
Well, JB. it is meaningless, alright, but because “what the rate would have been” is speculative. All we know is what it is.
But you missed the point. These spending sprees (temporary tax cuts, rebates, extended unemployment checks, etc.) can indeed produce an illusion of improvement. An illusion, because as soon as the subsidies end, the underlying problems resurface. It is like applying a layer of Clearsil to acne. And indeed, they make the real problem worse, by increasing the debt.
CougarGold on September 09 at 10:26 a.m.
In one of those rare instances where I agree with Seer who, in a rare instance, agreed with gmorton, I quote this gem:
“The rub is whether or not employers use that restored income to expand when demand isn’t really there to support it.”
EXACTLY! Yes, the employers benefit by a reduced FICA tax just as the employees do. But what to do with the money saved? On the part of many, they may use all the extra cash to reduce losses, at least for the small to mid size companies. But as Seer noted, what makes anyone think they’re going to hire anyone if there is no need for more employees?
What is really necessary for job growth and stimulation is really two-fold. First, restructure the tax code so that the U.S. is competitive with the other developed nations. Reform should include closing virtually all loopholes and exemptions then reducing the business tax rates Small to mid business needs care in this area on the personal tax front to accomodate Sub-S companies that pay taxes through the personal tax rates of individuals.
Secondly, regulatory reform that reduces the punitive effects of strict care in the U.S. versus other parts of the world. For example, the metals mining industry has virtually stopped building new mines in the U.S. while metals prices are off the scale. All you have to do though is look to British Columbia to see a construction boom for new mining projects. Why? Because the ore is placed in locations all around the world and mining companies are multi-national. Why go through the incredible hassle and expense in locating a mine in the U.S. when you can go to Papua-New Guinea or Chile or Argentina or Canada and get permitted and in the ground to recover gold or copper? We’ve regulated ourselves out of that base industry. Same with aluminum, steel and other base resources.
I’m not advocating polluting the heck out of our environment but I am advocating for competitive standards that allow us to support base industries that used to be the backbone of our economy. The pendulum has swung too far, to the point where we’ve lost our base industries to developing countries when we were the undisputed leader in our past. Pragmatic redesign of our regulatory structure can promote job growth, not just in the industries but in the design and construction of facilities and the spin-off impacts.
Regulation reminds me of golfing. The ball starts going off-line for some reason, due to some mistake in the swing. We try to correct the problem but instead, do something else to compensate for the first problem that is also wrong. Pretty soon, the entire swing is screwed up, the ball is going everywhere except down the middle, and we’re not able to recover a correct swing because we’ve built in so many faults that it’s hard to know where to start. That’s where we are in taxes and regulations; too many corrections that weren’t correct adding up to something unpredictable and not going in the right direction. Time to completely breakdown the swing and learn it over again.
Squid on September 09 at 11:55 a.m.
Well said, Coug. Basically, we have spun a huge web that we have to either tear down, and start over, or we have to free up the little bees that are caught up in the middle. Too many spiders, and not enough little bees. If the bees are free, they will multiply and produce honey for everyone.
Seems to me that if it was easier, or even a remote possibility for the average person to get the American dream, they would change course from followers to leaders. It’s too risky to endanger your family at this point. Decrease the risk and complexity, and people will spend their money because they can make a better future. As it is, the dream is security, because the risk is overwhelming.
A 25 cent per hour raise, for someone who makes $1000 per month, or a 50 cent raise, for someone who makes $2000 per month, doesn’t give decrease risk or add security….. Especially when there is no plan to pay for it.
greenlibertarian on September 10 at 1:11 a.m.
If you wanted the American Dream, you should have been born circa 1947- 1957.
The American Century is OVER!
Really, you don’t know that?
Pity that.
JBlim on September 10 at 7:28 a.m.
gmorton says: “And indeed, they make the real problem worse, by increasing the debt.”
Err, no gmorton, you’re forgetting that a stronger economy creates more income, and more tax revenue to the government, reducing debt. Also, when people are gainfully employed they don’t have to rely on government safety nets.