President Obama delivered a determined address to a joint session of Congress Thursday evening, laying out a bold, nearly half-trillion-dollar plan aimed at creating jobs and giving the weak economic recovery a shot in the arm.
The President’s job proposal is wide-ranging, including extensions of unemployment benefits and payroll tax cuts, tax incentives for hiring veterans, as well as funds to rehire teachers, renovate schools, fix roads and rehabilitate neighborhoods suffering from the blight of abandoned homes and buildings, fallout from the housing crisis.
Yet, one of the most serious hurdles the nation and Washington must overcome in jumpstarting the economy, Obama said, is deciding to put country ahead of politics and stop the finger-pointing and inside-the-beltway gamesmanship.
“The people of this country work hard to meet their responsibilities,” Obama told Congress. “The question tonight is whether we’ll meet ours. 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; whether we can restore some of the fairness and security that has defined this nation since our beginning.”
“No single individual built America on their own. We built it together,” he continued. “We have been, and always will be, one nation, under God, indivisible, with liberty and justice for all; a nation with responsibilities to ourselves and with responsibilities to one another. Members of Congress, it is time for us to meet our responsibilities.”
The total package, called The American Jobs Act, would be larger than $350 billion, according to sources with detailed information about the plan, with some reports placing the figure at $450 billion. As the White House has said throughout the week, the proposal includes plans to offset the total costs, although the administration has yet to spell out the fine print of the cost savings.
Calling it an “urgent time for our country,” the President said he plans to send the legislation up to the hill next week and urged Congress to pass it right away.
“There should be nothing controversial about this piece of legislation,” he said. “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.”
A small business component would cut employer payroll taxes in half with a limit of the first $5 million. It also would provide a tax break for hiring additional employees and allow for 100 percent expensing of business costs, providing a combined average savings for small companies with 50 employees of $80,000.
To help middle-class employees, as well as businesses, the proposal extends the 2 percent employee payroll tax cut next year, which Obama said would help the average middle-class family save $1,500.
The proposal also aims to help unemployed veterans by providing a tax credit to businesses that hire them and funds to help states rehire 200,000 teachers and modernize and renovate 35,000 schools across the country. Additional funds would go to help neighborhoods devastated by the housing crisis and renovate abandoned homes and buildings with the money going straight to the mayors and counties, not to state governments.
For the long-term unemployed, the plan provides an extension of unemployment benefits for another year, and gives businesses a $4,000 tax cut for hiring people who have been out of work six months or more. In addition, it includes language making it a crime to discriminate against the long-term unemployed.
While the President called on Congress to put partisanship aside, ideological differences between the two sides were readily apparent in both the reaction to the speech and the national priorities Obama stressed.
Senate Minority Leader Mitch McConnell (R-Ky) reacted to the speech by holding a procedural vote late Thursday night on a resolution disapproving a pending $500 billion increase in the debt ceiling, an attempt at instantly rebuking the President for calling for nearly the same amount in additional new spending. And Republicans pointedly withheld their applause when Obama called for extending unemployment benefits and openly grumbled after a line in the speech about Warren Buffett paying a lower tax rate than his secretary, what Obama called an “outrage [Buffett] has asked to fix.”
Obama wrapped up the speech by arguing that the country can reduce the deficit, spur the economy and pay for his new jobs plan in the process, but in order to accomplish all three, Washington needs to decide what its priorities are.
“Should we keep tax loopholes for oil companies?” he asked. “Or should we use that money to give small business owners a tax credit when they hire new workers? Because we can’t afford to do both. Should we keep tax breaks for millionaires and billionaires? Or should we put teachers back to work so our kids can graduate ready for college and good jobs? Right now, we can’t afford to do both.”
“This isn’t political grandstanding. This isn’t class warfare,” he said. “This is simple math. These are real choices that we have to make. And I’m pretty sure I know what most Americans would choose. It’s not even close. And it’s time for us to do what’s right for our future.”
House Majority Leader Eric Cantor (R-VA), one of Obama’s most vocal opponents in Congress, told reporters after the speech that he liked the idea of providing tax relief to entrepreneurs but didn’t appreciate the President’s “take it, or leave it” approach.
“When we’re providing tax relief to entrepreneurs … I think that’s a very good idea and something I think we can embrace right away,” he said. “The one thing that I sort of objected [to] was that this was a take it or leave it package, and that somehow if we reject the package, the President’s going to take that and hold us accountable. That approach does not work in Washington, that’s what the American people are rejecting.”
After the speech, Sen. John Thune (R-SD) accused Obama of making the deficit super committee’s job much harder by piling on more spending that must be offset. He also said he didn’t appreciate Obama’s “pass it now” rhetoric or his “lecturing” tone.
While most Democrats and liberal members praised the President for the bold ideas, Sen. Bernie Sanders (I-VT) said the “devil remains in the details.”
Sanders said he would have preferred more spending on infrastructure and has deep concerns about diverting tens of billions of dollars to additional tax cuts that would otherwise go to the Social Security trust fund.
“This is a second year in the row that we’re doing this … and when Social Security is under the kind of attacks it is right now, I’m not particularly sympathetic to that argument,” he said.
“Tax breaks are less efficient in creating jobs,” he added.
Ryan Reilly and Brian Fung contributed to this report.
Get the day’s best political analysis, news and reporting from the TPM team delivered to your inbox every day with DayBreaker. Sign up here, it takes just a few seconds.
