Fin24

Obama unveils plan to revive US economy

2011-09-09 07:16

Washington - President Barack Obama, looking to jolt both the US economy and his presidency, proposed a $447bn plan for creating jobs in a high-profile, nationally televised speech before Congress on Thursday.

Obama, facing a tough re-election fight next year, looked to stem the eroding confidence in his leadership as the mood of Americans darkens and emboldened Republican presidential challengers assail his record.

The newest and boldest element of Obama's plan would slash the payroll tax for the Social Security pension program both for tens of millions of workers and for employers, too. It also includes $105bn in public works projects and the renewal of $50bn in unemployment benefits for about 6 million Americans at risk of losing jobless insurance.

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.

"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."

His message was unmistakable to the point of repetition, as he told Congress more than 15 times in one way or another to act quickly. That was meant as a direct challenge by a Democratic president to the Republicans running the House of Representatives to get behind his plan, especially on tax cuts, or be tarred as standing in the way.

Obama will likely have a hard time getting much of his plan through Congress. Republicans control the House of Representatives and can use procedural tactics to block bills in the Senate.

Beyond their ideological opposition to Obama's plans, Republicans would seem hesitant to hand Obama a major legislative victory that could boost his re-election prospects.

Even before the speech, the top Republican in the Senate, Mitch McConnell, described Obama's expected ideas as retreads, saying: "This isn't a jobs plan. It's a re-election plan."

Political divide

The House leader, Speaker John Boehner, was more conciliatory, though made no promises. He said Obama's ideas would be considered but the president should give heed to Republicans' as well. "It's my hope that we can work together," he said.

Obama received a warm response in the House chamber, but then the usual political pattern took hold: Republicans often sitting in silence on the applause lines that had Democrats roaring.

In announcing a plan heavy on the tax cuts that Republicans traditionally love, Obama sought to achieve multiple goals: offer a bill that could actually get through a deeply divided Congress, speed hiring in a nation where 14 million are out of work, shore up public confidence in his leadership and put Republicans on the spot to take action.

Obama looked to put himself above the partisanship asking "whether, in the face of an ongoing national crisis, we can stop the political circus and actually do something to help the economy."

But politics shadowed every element of Obama's speech. He appealed to 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 from Republicans who wondered why Obama was telling them to put party above country.

Washington's political divide has become so intense that normally routine matters now lead to partisan spats. That included the timing of Obama's speech. Obama had asked to speak on Wednesday, at the time of a Republican presidential debate. Speaker John Boehner, in an unusual move, rejected the day and proposed Thursday instead.

Republicans cast Obama as swelling the deficit with reckless spending and proposing what they call job-killing tax increases. Democrats cast Republicans as out of touch with an American public that wants to see the government do more to create jobs and favors a mix of spending cuts and tax increases to bring down deficits.

Obama also has faced criticism from his own supporters, who say he has been too quick to yield to the demands of Republican, especially those associated with the anti-tax, small-government tea party movement.

In his speech, Obama defended the role of government and, without mentioning it by name, took on the tea party.

"This larger notion that the only thing we can do to restore prosperity is just dismantle government, refund everyone's money, let everyone write their own rules, and tell everyone they're on their own - that's not who we are," he said. "That's not the story of America."

Obama remains personally popular and a formidable campaigner. But his approval ratings keep tumbling and no incumbent president in recent history has won re-election with the unemployment rate anywhere near the current level, 9.1%.

In one striking sign of discontent, nearly 80% of Americans 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.

Obama took office in the midst of recession that began in December 2007 and ended in June 2009, costing America a staggering 7.5 million jobs. Even though many voters are spreading blame around, Obama owns the economy now and his political strategy of putting the onus on Congress holds risk.

If nothing comes of his jobs program and he tries to blame Congress, he will still be the most identifiable target for voter ire.

Obama will waste no time taking his sales pitch on the road. His first stop will be on Friday at the University of Richmond, in the Virginia congressional district of House majority Leader Eric Cantor, a frequent critic of the president's policies.

Comments
  • kolobe - 2011-09-09 07:28

    they usually create jobs by invading oil rich countries.more arms to be manufatured and the unemployed to be part of the military

      MonkeyBizz - 2011-09-09 09:39

      dead right kolobe, at least he is trying to do something different.

      Maryna - 2011-09-09 10:11

      @kolobe - stop typing, you are going to miss your cerebral enhancement surgery appointment, plus you still have to cash in your NYDA meal-ticket..!

  • Dries - 2011-09-09 07:50

    OMG... another "plan". Had Congress not stopped him in his silly tracks two weeks ago he would have been over the edge by now in his "plan" to borrow America into prosperity... Even amongst his own liberal party members he presently only has 39% popularity.

  • Dries - 2011-09-09 08:25

    His silly road to over-borrowing was fortunately blocked by Congress. Let us see where this gets him.

      Spyker May - 2011-09-09 10:23

      Dries - the '08 fin crisis was triggered by Wall St, the next one will be triggered by Main St - trust me though, the latter WILL be much worse. This time Obama is actually right - we do not seem to understand though, how vital the US economy is to the rest of us - the nincompoop-oxygen-thieves that cannot comprehend it, aside; right now, we need the USA to 'work' (literally and figuratively), else we will ALL end up without work. The reckless fools opposing the US are simply on a path of self-destruction - they just do not know that they do not know... To put it in simple terms - who would you prefer to be the most powerful person on earth - Obama or Gaddafi..?

      Dries - 2011-09-09 11:33

      Spyker, the options are far better than that. The options include a wise, conservative congress and a wiser, conservative President. Watch how the American voters confirm that next year, OMG, and how on earth do you bring Gaddafi into the equation? If you mentioned China and Japan, yes, maybe. Gaddafi has never been,is not, and never will be a factor in the internal US economy... You surely lost me there with your reasoning.

      Spyker May - 2011-09-09 17:22

      Relax Dries - I was asking a rhetorical question to demonstrate a point - viz not asking YOU... The point: the US economy must be resuscitated at any- and all cost (like what Obama is proposing), in fact it is even in the interest of the US's most vehement detractors - eg oom Moammar. I disagree wholly - the last 'one' that knows what is the best for the US economy = the 'US voter' in his/her current state of mind (hence my comment re 'Main St') - after all, it is Mr/Ms USA that got him/herself into the current mess. In short: the USA will NOT spend itself out of trouble, it will WORK itself out of trouble - Obama and his cronies are actually rather smart this time, pity it may be too late, as his poor run to date could sink the fist sincere proposal.

  • Andries - 2011-09-09 09:43

    The problem is Barack Obama and the sooner he leaves the sooner the Socialist agenda and Obamacare, wrecking the US economy, can be repealed and business confidence can be restored! Stop blaming the Republicans for trying to reign in spending and trying to balance the budget. A president with no business experience has to realize you can't spend your way out of a 14 trillion dollar debt problem by simply borrowing more and more!!!! What's been happening in Greece and Europe is a good example.

  • Zee - 2011-09-09 10:48

    Fire Bernanke, he is clueless! Stop creating debt everytime you print another dollar and you may see the end of your crisis! What is wrong with these clowns?

  • Gierg Seiznem - 2011-09-09 11:52

    It's not a simple solution, and anyone who thinks it is, is fooling themselves or ignorant on most of the issues. It's a balancing act, but Republican spiteful actions (in not considering tax increases as a solution to the deficit problem) could stall the US economy and create much negative sentiment in the country. Who that negative sentiment falls on (the current administration or opposition), will obviously determine who wins the election next year. By the way, US tax rates are extremely low by international and historical standands, so Obama's proposal for tax increases is not the same as the debate about taxes in other countries.

  • cleopatrafox - 2011-09-23 11:16

    Ever heard of the saying "you gotta spend money to make money"? Well for those of you who can't accept that all this was also caused by previous governments and presidents and Obama has had to take the fall, remember that he trying to help US as well as the rest of the World. Everyone needs to pull together and help think of a solution, not stand back and wait for 1 person to think of something on their own. I agree with Spyker May.

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