Speaking to Congress in Washington yesterday, President Barack Obama outlined the centerpiece of his re-election campaign in the form of a $447bn jobs package designed to alleviate the deflated US economy.
Following the painful deadlock this summer over the debt crisis, Obama made sure to urge swift agreement between the Democrats and the Republicans: “The question is whether, in the face of an ongoing national crisis, we can stop the political circus and actually do something to help the economy.”
In the televised joint session, Obama proposed a package of targeted tax cuts and government spending which aim at reviving the American job market. Unemployment rates has been steady at 9% or above for more than two years now, the voters are frustrated and the President saw fit to call the situation a ‘national crisis’.
Bloomberg reports that the package includes a $105 billion infrastructure proposal for school modernization, transportation projects and rehabilitation of vacant properties. Infrastructure spendings are expected to deliver most of its economic impact next year while some areas have to wait until 2013.
The president explained that he expects the recovery to be driven by businesses and workers — not by Washington. Instead, the administration is gearing up to help from the sideline. An estimated $35 billion is proposed as direct aid to state and local governments to stem layoffs of educators and emergency personnel, according to Bloomberg.
Furthermore, the main targets of the package will be the workers and small business owners who would be able to look forward to cuts in payroll taxes as an incentive for new hiring and development.
A final highlight proposes to grant states the authority to pay unemployment benefits to people who have been out of work for more than six months while they train for jobs at businesses for up to eight weeks. To encourage employers to take in these long-term unemployed, the unemployment-insurance funds will make sure the training will be at no cost to the business.
Obama’s proposal was met with both standing ovation and stony silence but some Republicans were willing to admit that the package promoted some common ground. Eric Cantor, House Majority Leader and a frequent critic of Obama, said that areas such as extending the payroll tax and especially the tax reduction for small businesses did appeal to Republican politics.
“That’s something we Republicans have been advocating for quite some time now,” he said to Bloomberg.