Obama to stress job creation

President Barack Obama goes before Congress tonight to argue for his new plan to urgently create jobs for the millions of out-of-work Americans, a way forward that some opposition Republicans have rejected before hearing the details and members of the Democratic base view as too timid.

President Barack Obama goes before Congress tonight to argue for his new plan to urgently create jobs for the millions of out-of-work Americans, a way forward that some opposition Republicans have rejected before hearing the details and members of the Democratic base view as too timid.

The speech to a joint session of the legislature, where Republicans control the House of Representatives, was expected to chart a middle ground, part of Obama’s continuing strategy to win the backing of independent voters who hold the key to his hopes for re-election next year.

Obama is expected to outline a series of measures – including temporary tax cuts – that Republicans have supported or even called for in the past. The tactic is designed to either bring Republicans along to join in owning the problem, or to force their hand and attempt to lay blame with them for failing to act.

A Republican rejection of the proposals would allow the White House to argue that Obama opponents had rejected their own ideas in favour of harming the president politically while also undercutting the needs of Americans desperate to find work.

Also, should the House block his ideas, the Obama plan would not be tested and, therefore, could not be found wanting. And it would provide a perfect vehicle for campaigning against the Republicans as obstructionists.

As an indication of what top Republicans were thinking, Senate Minority Leader Mitch McConnell said today that Obama seemed determined to simply reintroduce economic policies that have not worked.

“It’s time the president starts thinking less about how to describe his policies differently and more time thinking about devising new policies,” McConnell said.

House Speaker John Boehner, however, said he hoped there would be some proposals the White House and Republicans could agree on.

“We know the two parties aren’t going to agree on everything, but the American people want us to find common ground and I’m going to be looking for it,” Boehner said.

The unemployment rate, which stood at 5% at the start of the deep recession and 7.8% when Obama took office, is at 9.1%. Most worrying is the trend line. After a period of steady if modest job creation, employers have stopped hiring. There was no net change in jobs in August.

The president’s approval rating are sagging as Americans cast blame on both branches of government for continued high unemployment and the stumbling recovery from the worst economic downturn since the Great Depression of the 1930s.

In his speech tonight, Obama is likely to offer at least a 300 billion dollar (£188 billion) package of ideas – tax relief, unemployment insurance, spending to support construction jobs, aid to states to keep people in their jobs. Businesses would get their own tax breaks. And he will outline plans to pay for it all without, in the long term, raising the US’s spiralling debt.

Obama is expected to propose paying for some of his jobs initiatives by closing corporate tax loopholes and increasing taxes on wealthier Americans. Offsetting some cost of his economic plan with new tax revenue is likely to meet stiff resistance from Republicans, but the White House has argued that the public has supported a mix of spending cuts and revenue as a way to avoid higher deficits.

The president’s plan to pay for his ideas is a political necessity in a time of fiscal austerity. Deficit-boosting stimulus spending is out. But here, too, he is banking on a lot of help.

Obama plans to cover the cost by asking a new congressional supercommittee debt panel to go beyond its target of finding 1.5 trillion dollars in deficit reduction by the end of November, so the extra savings can pay for short-term economic help.

At the heart of Obama’s plan will be extending, by one more year, a payroll tax cut for workers that went into effect this year. The president wants the payroll tax, which raises money for the Social Security pension programme, to stay at 4.2% rather than kick back up to 6.2%. That tax applies to earnings up to 106,800 dollars.

Obama is expected to seek continued unemployment aid for millions of people receiving extended benefits. That programme is set to expire at the end of the year.

Since Obama took office in January 2009, nearly two million Americans have lost jobs. Almost 14 million people are out of work.

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