Calling on lawmakers to "stop the political circus and actually do something to help," President Obama laid out a roughly $450 billion package Thursday night that he said "would provide a jolt to an economy that has stalled."
"There are steps we can take right now to improve people's lives," Obama declared, as he unveiled what he called the "American Jobs Act" before a rare joint session of Congress.
The president's plan included the following items--many of which had already been floated by administration officials in recent weeks:
• Government spending in a wide range of arenas. Among the measures Obama proposed: an infrastructure bank designed to spur private investment in road and rail projects; a program to fund the repair and maintenance of public schools; a neighborhood revitalization program for areas hit hard by foreclosure; a jobs training program, modeled on one in Georgia, that allows the jobless to go on receiving benefits while training with a potential employer; and an extension of unemployment benefits.
• Tax cuts. That means an extension of the payroll tax cut for employees that's been in effect since January, and a new cut for employers, which would give them a full holiday from payroll taxes for a year if they hire a member of the long-term unemployed.
• Aid to states, The president proposed a battery of programs to allow cash-strapped states to avoid laying off police, firefighters, and first responders.
• An offsetting package of budget cuts. Obama has pledged to present these budget offsets to the deficit "super committee" next week, so that the entire effort won't increase the deficit.
A package that size, if passed in its entirety, could potentially give a boost to the economy--which is currently teetering on the brink of a double-dip recession. Most economists believe that $450 billion in extra spending and tax cuts translates to about 3 percent GDP growth, and about a 1.5 percentage points reduction in employment. That's not as much as many say the situation demands, but it would be significant nonetheless.
But the plan won't be passed in its entirety. And that's why the specifics of the president's proposal are less important than the feints and parries in the legislative process that come next.
Obama acknowledged as much. "The next election is fourteen months away," he declared, in a frank challenge to Republicans. "And the people who sent us here — the people who hired us to work for them — they don't have the luxury of waiting fourteen months. Some of them are living week to week; paycheck to paycheck; even day to day. They need help, and they need it now.
Obama pitched his plan as a package of ideas supported in the past by Democrats and Republicans alike. But GOP leaders have already expressed deep skepticism about the president's approach, arguing instead that scrapping regulations that stymie business should be the focus of a job creation plan. If Republican lawmakers prove willing to negotiate, the result could be something that at least gets the economy moving again. If not, the growing fears of a double dip recession could soon become a reality.