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President to Congress: 'Pass this jobs bill'

President Barack Obama speaks to a joint session of Congress at the Capitol in Washington, Thursday, Sept. 8, 2011.  (AP Photo/J. Scott Applewhite)
President Barack Obama speaks to a joint session of Congress at the Capitol in Washington, Thursday, Sept. 8, 2011. (AP Photo/J. Scott Applewhite) AP

WASHINGTON — Speaking to a joint session of Congress, President Barack Obama challenged lawmakers Thursday to "pass this jobs bill" — a blunt call to Congress to enact his $447 billion package of tax cuts and new government spending designed to revive a stalling economy and his own political standing.

"You should pass this jobs plan right away," Obama declared over and over in his 32-minute speech that eschewed his trademark oratory in favor of a plainspoken appeal for action.

With Republicans listening politely but with stone-faced expressions, Obama said, "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."

Though Obama's proposals — including an expansion of a cut in payroll taxes and new spending on public works — were widely expected, the package was substantially larger than predicted, and much of the money would flow into the economic bloodstream in 2012.

The centerpiece of the bill, known as the American Jobs Act, is an extension and expansion of the cut in payroll taxes, worth $240 billion, under which the tax paid by employees would be cut in half through 2012. Smaller businesses would also get a cut in their payroll taxes as well as a tax holiday for hiring new employees.

To a Congress that just emerged from the discordant debt-ceiling debate, the president promised "a more ambitious deficit plan" that he will release on Sept. 19. Obama said that proposal would include measures to trim back Medicare and Medicaid, ideas that have been controversial among many Democrats.

Republicans greeted Obama's proposals with some conciliation. "The proposals the president outlined tonight merit consideration," Speaker John A. Boehner, R-Ohio, said in a statement. "We hope he gives serious consideration to our ideas as well."

Mitch McConnell, R-Ky., the Senate minority leader who derided the plan even before the speech as "a re-election plan," was less conciliatory in a statement released after the speech:

"For months, we've been engaged in a national debate about spending and debt, about the need to get our nation's fiscal house in order, about the need to rein in government. A debate that was forced upon us by the historic run-up in debt that's occurred over the past 2½ years as a result of this president's unprecedented spending. Yet here we are, tonight, being asked by this same president to support even more government spending with the assurance that he'll figure out a way to pay for it later."

For Obama, burdened by the lowest approval ratings of his presidency, the address crystallized the multiple challenges he faces: reviving a torpid economy with a Republican House that rejects most of his prescriptions and seems emboldened by its success in the recent debt-ceiling negotiations with the White House to continue to defy the president.

At times, Obama edged into sarcasm. Promoting the extension in the payroll tax cut to Republicans, Obama said: "I know some of you have sworn oaths never to raise any taxes on anyone for as long as you live. Now is not the time to carve out an exception and raise middle-class taxes, which is why you should pass this bill right away."

Obama said most of his proposals had support from both parties, a contention that seemed doubtful, given the reception of Republicans. "There should be nothing controversial about this piece of legislation," he said. "Everything in here is the kind of proposal that's been supported by Democrats and Republicans."

The program includes the repackaging of some previous Obama proposals and the extension of other initiatives, including temporary payroll tax cuts that were enacted last year. But he also called for several significant new steps, such as enlarging that tax cut to provide $1,500 in savings for the average family and offering another tax cut for businesses that hire new employees.

Many economists say the government needs to pump hundreds of billions of dollars into the economy to avoid another downturn. But because virtually all of the measures in Obama's plan would require congressional approval, few would have an immediate impact. Some economists warned that even if major tenets of the plan were to pass, overcoming deep Republican skepticism, they might do little more than keep the economy growing at a snail's pace.

Coming during the first chapter of the 2012 presidential campaign and at a moment of peril for the economy, the speech could be one of the most pivotal of Obama's presidency.

"But the millions of Americans who are watching right now, they don't care about politics," Obama said. "They have real-life concerns. Many have spent months looking for work.

"The people of this country work hard to meet their responsibilities. The question tonight is whether we'll meet ours," he said.

The jobs plan was almost $150 billion larger than administration officials had previously indicated, helping Obama portray the proposal as bold.

"I think it's a laudable effort to try to boost the economy and the job market over the next 18 months. It's big enough to turn fiscal policy from being a significant head wind to a modest tail wind," said Mark Zandi, chief economist at Moody's Analytics, who has advised both Democrats and Republicans.

But Douglas Holtz-Eakin, a conservative economist, said the plan would make little difference.

"It's a philosophy that is more of the same: more temporary policies of a stimulus nature on the tax and infrastructure side that are unlikely to be significant enough to move the dial. It's more political than real," he said.

Economists generally regard the payroll tax cuts as important tools to drive the economic recovery but say that the employee and the employer parts of the plan have drawbacks.

"If you give somebody a tax cut and they just save it, then there are no jobs created," said Nigel Gault, chief U.S. economist with IHS Global Insight. "Direct spending is probably better because direct spending directly creates jobs."

Gault said there is another problem with the employer-side tax cuts: "All these proposals would be for one year. How much extra incentive is that going to give a business?"

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