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Obama Sends Job Bill to Congress: ‘Let’s Get Back to Work’

Monday, September 12, 2011

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Urging “no games, no politics, no delays,” President Obama sent his new job creation package to Congress on Monday (Sept. 12) with a call for swift action.

Obama called his $447 billion American Jobs Act a “common-sense” blueprint for economic recovery.

Lawrence Jackson / Official White House Photo

President Obama presented the American Jobs Act in an address Thursday (Sept. 8) to a Joint Session of Congress.

“The only thing that’s stopping (this plan) is politics,” he told a crowd of teachers, veterans, small-business owners and others in remarks at the White House Rose Garden. “Let’s get something done. Let’s get back to work.”

Infrastructure Spending, Tax Cuts

The proposal includes:

• Tax Cuts. The bill would cut the payroll tax in half for 98 percent of businesses, offer a “payroll tax holiday” for added workers or increased wages, extend 100% expensing into 2012, and reduce regulations to help businesses access capital.

It would also expand last year’s payroll tax cut—now set to expire at the end of the year—while reducing employee contributions further, to 3.1%.  The current cut, which has cost $112 billion so far, allows employees to pay 4.2% instead of 6.2% on their first $106,800 of wages into Social Security.

• Infrastructure Investment and Infrastructure Bank. The package includes $60 billion in investments for infrastructure and establishes a bipartisan National Infrastructure Bank, with the goal of modernizing roads, rail, airports and waterways while employing hundreds of thousands of workers.  A new “Project Rebuild” will put people to work rehabilitating homes, businesses and communities. At least 35,000 schools would be modernized. The White House says the plan would also prevent teachers, police and firefighter layoffs.

• Unemployment Reform. The plan includes work-based reforms to prevent layoffs and give states greater flexibility to use unemployment insurance funds to best support job-seekers, including work sharing and a new “Bridge to Work” training program. Also planned: a $4,000 tax credit for employers who hire long-term unemployed workers and more opportunities for low-income youth and adults through a fund for subsidized employment and other initiatives.

The president will call on the Joint Committee to come up with additional deficit reduction necessary to pay for the plan and still meet the deficit target.

Economic Forecast

Economists at Goldman Sachs Group Inc., Moody’s Analytics Inc. and JPMorgan Chase & Co. said that the plan would boost the U.S. economy by up to 2 percent, Bloomberg reported.

Mark Zandi, chief economist at Moody’s Analytics in West Chester, PA, said the proposal would create 1.9 million jobs, lower the unemployment rate by one percentage point, and add 2 percent to next year’s GDP, the news service said

Goldman Sachs estimated that the plan would add 1.5 percent to the economy, Macroeconomic Advisers LLC said 1.3 percent, and UniCredit Research said up to 2 percent, according to Bloomberg.

GOP: Mixed Reaction

Reaction from Republicans was mixed, but initially less hostile than it has been this year.

House Majority Leader Eric Cantor of Virginia, a chief Obama foil during this summer’s debt debate, was among those signaling his intention to cooperate, according to CNN.

“I heard plenty in the president’s speech last night where I think that there is a lot of room for commonality, and we can get something done quickly,” Cantor told CNN on Friday.

Added Rep. Mike Simpson, R-Idaho: “The American public is fed up with Washington–understandably.”

House Minority Leader Nancy Pelosi said Democrats were “overwhelmingly favorable” about the plan and noted House Speaker John Boehner’s statement that the proposals “merit consideration.”

The Democratic National Committee is also supporting the White House, launching an ad campaign in eight swing states urging viewers to read the president’s plan and “fight for it.”

‘Mini-Me Stimulus’

Senate Republicans were less enthusiastic. “He gave a rally speech,” said one senior Senate Republican aide. “I think the senators were hoping the president would try a different route and one that might actually promote job growth. Their view is we got more of the same.”

Republicans also appeared split on the infrastructure piece of the package. Some said they could support the approach, depending on how it is paid for, while others dismissed it as a rehashed “Mini-Me stimulus.”

Obama is pushing hard to avoid the gridlock that held the federal budget hostage this summer.

“There are some in Washington who would rather settle our differences” by waiting for the next election, Obama said. “That’s the attitude in this town.”

But “these aren’t games we’re playing here,” he said. “Folks are out of work.”

Comment from James Johnson, (9/13/2011, 11:22 AM)

This proposal is incorrectly named and should be called the American Tax Act. The President said it would be paid for, but he failed to say it would be paid by tax increases. Beyond that it is just another stimulus plan, pushing money to areas that will not cause any new jobs. An infrastructure bank sounds good, but it seems much of the money goes to fund teachers and cops. The funds that do go to infrastructure have expensive strings attached. All in all it is a rerun of the failed stimulus plan. This proposed Act should be intended to help the American people, but sadly it appears to be politics as usual intended to play out a scenario to gain the intended political goals. Will it cause employment? Unfortunately not enough to notice. The sad part is jobs could be created almost immediately if they would simply remove government impediments and allow business to grow. Of course that will not be done because it would cost nothing, while the goal is to increase taxes, and it would mean relinquishing some government control, again the opposite of their intended goal. It's a sad situation for the American people that politics prevails over people.

Comment from George McCormic, (9/14/2011, 7:22 AM)

James Johnson is right on target. If the government would step aside and allow businesses to conduct business (remove some of their petty regulations) there would be jobs created. But as stated the government would some of it's power and HEAVEN FORBID THAT, because we all know that government solves all problems. Who made the mess we are in now. GOVERNMENT.

Comment from Mark Kwasny, (10/3/2011, 9:28 AM)

Both of these comments are well put and have my agreement.

Comment from Nava Skolnik, (10/4/2011, 3:06 AM)

I agree with all three comments, what surprise me is that there was no citing in the article of any economic experts that thinks that it will dig us even deeper into the hole. I believe that more spending will have a more devastating effect on our economy.

Comment from Catherine Brooks, (10/4/2011, 9:22 AM)

I'd like to know specifically how government made the mess. Was it not big banks and Wall Street who took risks with our money and screwed up? Is it not the banks like Wells Fargo who paid off their bailout funds quickly so they didn't have to have oversight checking their out-of-control, and outrageous executive compensation packages? With 1% of US population holding 50% of the wealth, why should the small businesses take the hit more than the Big Guys? Who is being protected if the government rules don't catch those used-to-be secret transactions of the Big companies? I'm not so confident that big business knows how to improve things. Small businesses seem to protect their employees better and take safer risks with their own money.

Comment from Patrick Eddins, (10/5/2011, 8:00 AM)

Ms Brooks, Most construction companies and painting contractors are considered small businesses. Corporatism is a problem, but who are they in bed with- the government. Government intrusion in the free market always produces unintended consequences. This situation was caused by government intrusion into the mortgage lending process and the subsequent printing of vast amounts of money to "paper" over the mess. Class warfare rhetoric won't solve any problems. Why don't we take our frustration out at the ballot box and elect people that will reign in the size of this government monster, not make it more powerful.

Comment from Tim Poor, (10/5/2011, 9:07 AM)

And who would that be Mr Eddins? Both parties are asleep at the helm! Both parties has grown governement to extreme levels for the reasons mentioned above, MORE POWER. We are in a pickle and I agree it will take the election of true conservatives with no political ties to repair the damage. And I don't think that can be done on a large enough scale during one election cycle. Hopefully, for the greater good of our country, I'm wrong! I agree with most, this "jobs bill" will create no jobs and give the government exactly what it wants, MORE POWER!

Comment from Jim Call, (10/5/2011, 12:44 PM)

The government may not have made the mess, Ms. Brooks, but it certainly encouraged the actions which made the mess. To address your specific questions: The "big banks" came to be through the predicted consequences of the CRA, accelerated by SarBox, and their risky lending was encouraged and financially supported by Freddie and Fannie--again, both government enterprises. The outrageous compensation packages have been driven by the SEC mandatory executive pay disclosures and the IRS-driven shift from cash to equity compensation plans. One percent of the US population does not come close to holding 50 percent of the wealth: the wealth that matters is in individuals' innovation and intellect, which is why the names of the top earners changes so much over any five-year period. It is government interventions, as mentioned earlier in this conversation, that inhibit individual risk taking in favor of protecting what you call "the Big Guys" who make the D and R party campaign contributions--a shift from individual contributions to individual candidates which has been driven by McCain-Feingold, which may yet be repealed as unconstitutional, although, like the other legislation I've cited, only after causing predictably overwhelming structural distortions. "Government rules" never have and never will catch the still-secret transactions of the government itself; customers and investors always catch the secret or non-secret transactions of big and small companies. The hubris required to think Mr. Obama and any 50 of the brightest people in the country (if they were on his team, which they are not) can never do as good a job of solving our problems as the 300 million consumers telling 30 million business establishments what they want and what trades they're willing to make in price and quality when they spend their 30 trillion dollars each year.

Comment from Jeff Croll, (10/7/2011, 7:32 AM)

Please explain what impediments the government has put in the way of business since the credit collapse.

Comment from Rudi Rennert, (10/7/2011, 10:52 AM)

Great question Jeff, I use the analogy "death by 1,000 razor blades". One of the most pressing legislation that has businesses on the fence is the massive Healthcare bill. I know that it was sold as helping the less fortunate, but the reality is that it is a monstrosity that will drag our country further into debt if it is not repealed. I have pulled only one section for you to reference, Buried in Section 9006 of the healthcare bill is a provision requiring you to file a 1099 on any business, vendor or supplier that you pay more than $600 dollars a year to. As stated earlier in this conversation, small business is the majority strength of our economy and these regulations strangle their ability to earn a living as well as provide jobs when the market demands it.

Comment from Car F., (10/7/2011, 12:28 PM)

Politicians of all stripes should consider ending the myriad of wars of aggression in which the country is involved around the world and concentrate instead in solving the present problems: lack of education, health, housing, aging and collapsing infrastructure, unemployment, these are REAL problems of national [in] security. While generals, politicians and pundits announce that “victory is around the corner” billions are stolen, disappeared or siphon off in distant lands fuelling the drug trade and suffering. In the meantime, entire cities in the US are forced to close schools and public services in order to exist. Most thinking people would find this situation and absolute disgrace and would demand an end to it.

Comment from Car F., (10/7/2011, 12:33 PM)

..By the way,....I love the topics and the respectful tone of this forum...keep it up.

Comment from shane hirvi, (10/10/2011, 1:26 PM)

Death by a thousand razor blades??? Should such a 1099 requirement be put in place your accounting software will be updated to reflect the changes and you will receive a quarterly or yearly reminder to print and send your forms to the IRS.

Comment from Gerald Burbank, (10/11/2011, 6:34 AM)

To be clear, the deficit has increased exponentially since 1980. Deregulation and entitlement spending is out of control.Yes, Walstreet did go on a binge. Every administration has had a hand in this. Social Security, Medicare and Interest now make up more than 55% of the budget. We all want the benefits and none of us want to pay taxes to pay for it. The party is over, and neither political party, business leaders, the workers, the rich or the poor are willing to do what it takes to pay for it. It's a sad time for this country. In short, it's time to go to work.

Comment from George McCormic, (10/11/2011, 6:57 AM)

It is time for this country to get real. One of the things that I really fail to understand is when the past administration and then the present began to bail out various companies. While understanding that we need to keep people working, who caused the companies to get into trouble? most of it was greed. If a company is faultering then seek guidance but do not under any circumstances bail them out. It didn't start yesterday, there was chrysler, the airlines, gm, big banks and other financial institutions. Somewhere it has to stop. Of course what lies behind the bailouts, campaign dollars. It boils down to politics pure and simple. Those in, no most in Washington could care less about this country, as long as they stay in power. It is time for term limits, remove the lifetime politicians and get the great land back to to being the leader of the free world. Good morning all and have a great day.

Comment from Gerald Burbank, (10/11/2011, 8:25 AM)

Institute term limits, limit campaign contributions, abolish PACs, and enforce consequences for company's that get federal dollars. We also need to go back to the reserve limits for investment banks that were in place before 2000. The bi investmants banks also need to go back to the model that was in place before they were deregulated (so that the principles have their own money at risk and not all of ours). Fat chance....

Comment from Catherine Brooks, (10/16/2011, 6:27 PM)

George and Gerald, I agree that greed has been a huge driver. I heard the CEO of GE say his job is to make his investors happy. Yes, he is bringing some manufacturing back to the US but most of the parts, he admitted, still come from overseas. The rich don't worry about the social, health, and financial benefits created by FDR to get us out of the Depression. Of course, they don't want their taxes increased when they get nothing for them in return. Eliminating lifetime politicians who worry more about keeping their jobs than guiding America sounds good to me, too.