Obama Proposes $450 Billion American Jobs Act

Before a joint session of Congress Thursday night, President Obama outlined what he called the American Jobs Act, and he repeatedly called on lawmakers to pass it "right away." Among other things, the proposal includes a cut in payroll taxes for both employers and employees.

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DAVID GREENE, host:

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Again and again last night, President Obama repeated a simple four-word sentence. He was making a demand of Congress. The sentence was: Pass this jobs bill.

INSKEEP: According to a transcript, he said it eight times to a joint session of Congress and said something like it several more times. Deep into a year of bitter political fights, the president was challenging lawmakers to pass a plan to put more Americans back to work.

GREENE: The president proposed a series of tax cuts and new government spending with a total price tag of nearly $450 billion. He argued that Republicans have supported many of these ideas in the past.

NPR's Scott Horsley reports.

SCOTT HORSLEY: President Obama left the White House in a steady downpour last night for the short drive to Capitol Hill. The economic storm clouds have been gathering too. With stubbornly high unemployment and mounting danger of a new recession, Mr. Obama told lawmakers they need to stop the political circus and do something to put people back to work.

President BARACK OBAMA: The next election is 14 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 14 months.

(Soundbite of applause)

HORSLEY: Mr. Obama outlined what he called the American Jobs Act, and repeatedly called on lawmakers to pass it right away. The proposal includes a cut in payroll taxes for both employers and employees. That would make it cheaper for employers to hire new workers, and give employees a boost in their take-home pay, some $1,500 dollars a year for the typical family. Workers already got a smaller break on their payroll taxes this year, but it's due to expire at the end of December. And Mr. Obama challenged lawmakers, including skeptical Republicans, not to let that happen.

President OBAMA: I know that some of you have sworn oaths to never raise any taxes on anyone for as long as you live. 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.

(Soundbite of applause)

HORSLEY: The president's plan also includes $30 billion to prevent teacher layoffs, $62 billion to help the unemployed, and more than $100 billion for new public works projects, so idle construction crews can get dirty.

President OBAMA: The idea for a big boost in construction is supported by America's largest business organization and America's largest labor organization. It's the kind of proposal that's been supported in the past by Democrats and Republicans alike. You should pass it right away.

(Soundbite of applause)

HORSLEY: The president's overall jobs plan is more than half the size of the original stimulus, which he pushed through Congress during his first month in office. Unlike 2009, though, Republicans now control the House. So this new proposal is likely to face a much tougher hearing.

Economist Nigel Gault of IHS Global Insight thinks the original stimulus worked, but many people don't see it that way. Gault is doubtful Republicans will approve more than a bare minimum of the president's plan this time around.

Mr. NIGEL GAULT (IHS Global Insight): Their response to the president's proposals is very likely to be you're proposing more of the stuff that didn't work the first time around. Why should we sign on to this?

HORSLEY: Republicans have put forward their own jobs proposals, which rely heavily on tax cuts and doing away with government regulations. Mr. Obama says he's willing to set aside some regulations, like a proposed air pollution rule he tabled last week. But he'll only go so far.

President OBAMA: What I will not do is let this economic crisis be used as an excuse to wipe out the basic protections that Americans have counted on for decades.

(Soundbite of applause)

HORSLEY: The scale of the president's jobs proposal is head-spinning after months in which Washington was preoccupied with deficit reduction. The White House says it's still concerned about curbing red ink but that tackling unemployment is the more urgent challenge.

Federal Reserve Chairman Ben Bernanke also warned yesterday that trying to cut government spending too quickly could jeopardize the fragile recovery.

Mr. BEN BERNANKE (Federal Reserve Chairman): There's ample room for debate about the appropriate size and role of the government in the longer run. But in the absence of adequate demand from the private sector, a substantial fiscal consolidation in the shorter term could add to the headwinds facing economic growth and hiring.

HORSLEY: Mr. Obama says Congress can offset the cost of his jobs program with deeper deficit reduction in future years. Later this month, he'll offer a deficit-cutting plan that includes gradual spending cuts, reforms to Medicare, and higher taxes on the wealthiest Americans.

President OBAMA: 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?

(Soundbite of applause)

HORSLEY: Mr. Obama says he'll be taking that jobs message to every corner of the country, beginning today with a speech in Richmond, Virginia. That just happens to be the home district of the House Republican leader.

Scott Horsley, NPR News, Washington.

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