President Barack Obama greets supporters at a rally at the Jiffy Lube Live arena, in Bristow, Virginia. (J Scott Applewhite, AP)
Washington - President Barack Obama, who has convinced Americans to give him another four years in office, now faces the tough task of getting the US economy to grow more quickly.
Gross domestic product has struggled to expand by more than 2% a year since the 2007-09 recession and unemployment remains high at 7.9%. About 23 million Americans are either unemployed, working part-time because they can’t find full-time work, or want a job but have given up the search.
Here are Obama’s key plans for the economy:
Obama has said his jobs plan would strengthen manufacturing, help small businesses, improve the quality of education and make the country less dependent on foreign oil.
He envisions 1 million new manufacturing jobs by 2016 and more than 600 000 jobs in the natural gas sector, as well as the recruitment of 100 000 math and science teachers.
Repairing and replacing old roads, bridges, airport runways and schools are part of his plan to put Americans back to work. Half of the money saved from ending the wars in Iraq and Afghanistan would be used to fund infrastructure projects.
Unlike at the start of his first term, when a Democrat-run Congress approved Obama’s $840bn in stimulus, the president will struggle to get any new major spending plans approved by the House, which remains under Republican control.
Obama has proposed cutting the government budget deficit by more than $4 trillion over the next decade by allowing tax cuts for upper-income Americans enacted during the George W Bush administration to expire, and by eliminating loopholes. The goal is to balance the budget down the road.
Obama backs cutting the top corporate income tax rate to 28% from 35%. He has offered a long list of corporate tax breaks to end, ranging from inventory accounting to interest on overseas profits and tax provisions benefiting oil and gas companies. He wants to eliminate tax breaks for companies that send jobs and profits overseas.
Half of the money saved from ending the wars in Iraq and Afghanistan would be used to reduce the deficit.
The Federal Reserve
Obama may want to offer Ben Bernanke a third term in charge of the central bank but Fed watchers say the former Princeton professor has probably had enough after eight grueling years in the job. Bernanke’s term as chairperson expires on January 31, 2014.
Fed vice-chairperson Janet Yellen is viewed as a leading candidate to succeed Bernanke and would be at least as ready to keep monetary policy ultra-stimulative until the labour market has improved substantially.
Obama is likely to stick to the path he laid out in his first term, which included a broad reform of Wall Street in response to the financial crisis that blew up in 2008. Regulators are due to put in place the small print of the so-called Dodd-Frank financial reform law.
Obama has promoted efforts to help troubled borrowers refinance their mortgages and benefit from record low interest rates but far fewer American homeowners have been helped than originally planned.
Obama has locked horns with the regulator of government-controlled Fannie Mae and Freddie Mac, Edward DeMarco, failing to convince him to allow the mortgage finance firms to reduce principal for borrowers who owe more than their homes are worth. Resolution of the standoff is unlikely any time soon.
Democrats and Republicans agree that the government’s outsized presence in the US mortgage market through Fannie Mae and Freddie Mac needs to be curtailed.
Fannie and Freddie account for about 60% of the mortgage market.
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