Payroll taxes: keystone of Obama jobs plan

Payroll taxes would be slashed for workers and employers, under the Obama proposal. Besides payroll taxes, the plan calls for $105 billion in public works and $50 billion in renewed unemployment benefits.

Kevin Lamarque/Pool/AP
President Obama delivers a speech to a joint session of Congress at the Capitol in Washington Sept. 8, 2011 as Vice President Joe Biden and House Speaker John Boehner look on. A key part of the president's plan is to slash payroll taxes for workers and employers.

Barack Obama, looking to jolt both the U.S. economy and his presidency, proposed a $447 billion 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 $105 billion in public works projects and the renewal of $50 billion 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."

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 percent.

In one striking sign of discontent, nearly 80 percent 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.

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