Obama unveils $447B jobs package

WASHINGTON -- President Obama urged Congress Thursday night to pass a surprisingly big, $447 billion jobs package that's intended to spur business hiring and consumer spending in an economy that has sputtered almost to a halt.

The package, more than half the size of Obama's $825 billion economic stimulus plan passed in February 2009, would slash payroll taxes by 50% next year for employees and small businesses, extend unemployment benefits, and create or save jobs for teachers, police and firefighters, and construction workers.

"You should pass this jobs plan right away," Obama defiantly told joint session of Congress filled with enthusiastic Democrats and skeptical Republicans. "There should be nothing controversial about this piece of legislation. Everything in here is the kind of proposal that's been supported by both Democrats and Republicans, including many who sit here tonight. And everything in this bill will be paid for."

The president didn't say how he would pay for his proposals but promised to do so a week from Monday, when he submits a deficit-reduction plan to a congressional committee charged with cutting red ink by at least $1.2 trillion over 10 years. Obama will add at least $447 billion more to the task.

The jobs plan includes these main elements:

• Cutting the 6.2% payroll tax paid by both employees and employers to 3.1% next year. This year, only employees got a 2-percentage-point cut. That would cost $240 billion, more than half of the total package.

• Spending $140 billion to save the jobs of state and local teachers and first responders, repair deteriorating schools and rebuild roads, railways and airports.

• Extending jobless benefits to the unemployed, with special emphasis on those out of work at least six months and those in low-income neighborhoods.

While most of the initiatives have been tried before with limited success, weaving them together into such a large package marked a bold move for a White House that has been on the defensive for more than two years of heavy government spending with only paltry economic growth to show for it.

And delivering the 33-minute speech before a joint session — a format used only three times in the past two decades except for State of the Union addresses — represented another risky venture for a president known for his speech-making ability.

Republicans blasted the plan even before it was released, just as they have attacked the original stimulus plan for failing to create robust growth and tame the nation's 9.1% unemployment rate. Most independent economists say the first plan helped, but only to prevent a full-fledged depression.

"This isn't a jobs plan. It's a re-election plan," said Senate Republican leader Mitch McConnell of Kentucky. "It's time the president start thinking less about how to describe his policies differently and more time thinking about devising new policies."

That said, it remains unclear how a divided Congress will deal with Obama's proposal. Republicans don't like the concept of government stimulus, and nearly all of them voted against the initial version. But they also favor tax cuts and infrastructure improvements, which represent the twin centerpieces of the plan.