WASHINGTON – President Obama made an impassioned appeal Thursday night for $447 billion in tax cuts and government spending to boost the nation’s lagging economic recovery, calling on lawmakers to put politics aside and work together to solve the jobs crisis.

Before a joint session of Congress, the president announced a package of tax cuts for employers and employees, spending on schools and roads, aid to states to keep teachers in jobs, and assistance for the unemployed.

In a plain-spoken speech, Obama repeatedly insisted that lawmakers approve the plan, which is composed of slightly more tax cuts than new spending.

The program includes the repackaging of some previous Obama proposals and the extension of other initiatives, including temporary payroll tax cuts that were enacted last year. But he also called for several significant new steps, such as enlarging that tax cut to provide $1,500 in savings for the average family and offering another tax cut for businesses that hire new employees.

“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 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.”

The $447 billion cost of the program is more than half that of the stimulus package passed by Congress in 2009 and reflects the severity of the nation’s economic challenge. Last week, the government reported that job creation came to a halt in August and that the nation’s unemployment rate was stuck at more than 9 percent, a sign that the economy was at imminent risk of dipping back into recession.

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Many economists say the government needs to pump hundreds of billions of dollars into the economy to avoid another downturn. But because virtually all of the measures in Obama’s plan would require congressional approval, few would have an immediate impact.

Some economists warned that even if major tenets of the plan were to pass, they might do little more than keep the economy growing at a snail’s pace.

Coming during the first chapter of the 2012 presidential campaign and at a moment of peril for the economy, the speech was one of the most pivotal of Obama’s presidency.

“There should be nothing controversial about this piece of legislation,” he told lawmakers. “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.”

The 32-minute address was an attempt by Obama to break from the acrimonious debate over government spending and deficits that has consumed Washington for much of the year.

He pledged to provide a proposal Sept. 19 that would fund his jobs package. That plan would also include proposals to tame the nation’s debt over the long term by overhauling entitlement programs and personal and corporate income taxes.

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Despite his call for bipartisanship, White House advisers have privately acknowledged that passage of the full package is unlikely. Advisers say Obama will blame Republicans for the jobs crisis if they don’t accept his proposal.

House Republicans have said they’re willing to work with Obama on payroll tax provisions, and they have expressed support for some spending on infrastructure.

The substantial majority of the jobs program would take effect within a year.

“I think it’s a laudable effort to try to boost the economy and the job market over the next 18 months. It’s big enough to turn fiscal policy from being a significant head wind to a modest tail wind,” said Mark Zandi, chief economist at Moody’s Analytics who has advised both Democrats and Republicans.

But Douglas Holtz-Eakin, a conservative economist, said the plan would make little difference.

“It’s a philosophy that is more of the same: more temporary policies of a stimulus nature on the tax and infrastructure side that are unlikely to be significant enough to move the dial. It’s more political than real,” he said.

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The jobs plan is a mix of new ideas and extensions and expansions of existing policies.

Obama proposed extending and expanding the payroll tax cut, which this year was lowered from 6.2 percent to 4.2 percent. He proposes reducing that tax on workers further in 2012, to 3.1 percent. The administration hopes the expanded tax cut would put more money into the pockets of middle-class families and spur them to spend at a time when a lack of consumer demand is a major drag on the economic recovery.

He would encourage hiring by also cutting the payroll taxes that companies pay, to 3.1 percent from 6.2 percent in 2012.

Obama proposed $140 billion in government spending, with most of that going toward the building of highways, roads, railways and aviation facilities, as well as modernizing public schools and community colleges.

The president is responding to the major budget crunch affecting states and localities that has led to mass layoffs of municipal employees, especially teachers. His plan proposes $40 billion in aid to prevent the layoffs of up to 280,000 teachers, as well as police officers and firefighters.

The final part of the plan seeks to extend unemployment insurance benefits for the jobless. This effort, costing $62 billion, would overhaul unemployment insurance so that the jobless could continue to receive benefits while in job training. It also would offer tax credits of up to $4,000 for companies that hire people who have been unemployed for more than six months.

 


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