“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
WASHINGTON (AP) — Hamstrung by budget cuts and a tight debt
ceiling, President Barack Obama is preparing a September jobs
package with limited tools at his disposal to prime the economy and
crank up employment.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
At a minimum, the president’s plan will call on Congress to extend
current payroll tax cuts and jobless benefits, spend money for new
construction projects and offer incentives to businesses to hire
more workers. But economists say that while that would eliminate
some drag on the economy and maintain the status quo, it won’t be
enough to propel it to new heights.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
The president’s plan, which he will announce in a major speech next
week, will be far less ambitious than the $825 billion stimulus of
2009, passed when the economy was still shrinking and when
unemployment stood at 8.2 percent. Now the economy is growing
sluggishly but unemployment is nearly a full percentage point
higher – 9.1 percent for July.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
Economists who advocate for government intervention in the economy
estimate that it would take a package of at least $300 billion to
avoid backsliding and even more to give the economy a
lift.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
That’s a tall order for a president facing a divided Congress where
Republicans, demanding fiscal austerity, reject the notion that
short-term infusions of taxpayer money into the economy can prod a
sluggish recovery. Even without Republican opposition, such a level
of spending would require short-term borrowing that would move the
government closer to its new debt ceiling before the November 2012
election, something Obama is determined to avoid.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
The president’s speech will set the stage for the economic debate
to come in Congress. A congressional supercommittee has been given
the job of finding at least $1.5 trillion in deficit reduction. As
part of his economic plan, Obama plans to propose even more deficit
reduction to help pay for the up-front cost of his jobs
initiatives.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
The listless economy, which has left millions of Americans out of
work and threatens the savings of millions more, is the biggest
obstacle facing Obama’s re-election. Making the case for his
economic programs will be central to the remaining 18 months of his
term.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
“Our great challenge as a nation remains how to get this economy
growing faster,” Obama said Monday. “That’s our urgent
mission.”
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
The president is certain to call for extending a one-year payroll
tax cut for workers and unemployment benefits that expire in
January, at a combined cost of about $175 billion. He also has lent
support to a proposal to create an “infrastructure bank,” a fund
that would be seeded by the government but fed by private
investment to pay for major road, bridge and other public
construction. Even advocates of the plan, however, say that
proposal probably would not be in place to generate jobs for about
two years.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
Among other measures under consideration, but not yet
decided:
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
– A major school construction initiative of up to $50 billion. Its
advocates include Vice President Joe Biden’s former chief economic
adviser, Jared Bernstein, who monitored progress of the 2009
stimulus. Bernstein said school construction and renovation would
be far more labor-intensive than some of the public projects paid
for by the stimulus. “We kind of thought during the recovery act
that we would see 50 hardhats and 10 machines, and it ended up
being the other way around at some of these sites,” he
said.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
– A payroll tax cut for employers, in addition to the one for
workers. Persons familiar with the White House discussions say top
aides prefer to target such cuts to employers who expand their
payrolls, thus serving as an incentive to hire.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
-Encouraging corporations to bring into the United States some of
their foreign sources of income at preferential tax rates in
exchange for job creation measures.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
-Tying unemployment insurance payments to on-the-job training.
Obama has applauded a program under way in Georgia in which jobless
benefits go to employers who hire the unemployed as
trainees.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
Mark Zandi, the chief economist at Moody’s Analytics who has
advised Republicans and Democrats, said that without government
action, the private sector would have to grow by more than 4
percent to generate enough jobs to keep unemployment from
rising.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
“That seems like a heavy lift at this juncture,” he
said.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
Bernstein said that if Congress fails to renew the payroll tax cut
and unemployment benefits, the jobless rate would probably remain
unchanged by the end of next year.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
“If they renew them, we have a better chance of a jobless rate
that’s 8.5 or below, which isn’t great either, but is a whole lot
better than 9,” he said.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
Obama’s plan is likely to be found lacking on both ends of the
political spectrum.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
Republicans say Obama should focus on cutting taxes for
corporations and reducing regulatory burdens, steps they say will
free the private sector to spend and hire. Several have said they
would oppose extending the one-year payroll tax cut enacted in
December, even if that would be the equivalent of a tax increase on
workers.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
Conservative economist Kevin Hassett, whose thinking often
influences Republicans, argues that short-term government spending
to spur the economy can backfire in a slow recovery because the
dose of stimulus can run out before a recovery takes hold. That
creates an economic drag that can push the economy back into
recession or forces yet more spending that drives up government
debt.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
Hassett says a better way is to reduce the costs of long-term
benefit programs like Medicare and Social Security and use some of
the savings to enact a permanent tax cut for corporations, thus
spurring higher earnings.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
Some liberal economists say Obama is hardly spending enough to make
a difference.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
“I don’t think their rhetoric matches their actual budget policy,”
said Lawrence Mishel, president of the liberal Economic Policy
Institute.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
Mishel said the agreement struck at the beginning of August to
increase the debt ceiling by $2.4 trillion in exchange for budget
cuts limited the president’s options.
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
“font-family: Arial, Helvetica, sans-serif; font-size: 13px; -webkit-border-horizontal-spacing: 2px; -webkit-border-vertical-spacing: 2px;”>
“The debt deal doesn’t allow any sizable amount of deficit spending
or increased spending,” he said. “If you `re going to pay for it
later, how do you do that when you have a tight amount of debt that
you can take on over the next year and a half?”
“font-family: Verdana, Times, serif; font-size: 12px; text-decoration: none; line-height: 13px; color: #000000; font: normal normal normal 12px/normal verdana, helvetica, arial;”>
about our“http://hosted2.ap.org/APDEFAULT/privacy”>Privacy
Policy
