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Stimulus part two

Economy | President Obama pitches to Congress and America a new $450 billion job plan

President Barack Obama pleaded with lawmakers Thursday night to make the nation's persistent unemployment woes job No. 1 for this fall.

"The people of this country work hard to meet their responsibilities," Obama told a joint session of Congress and a national television audience. "The question tonight is whether we'll meet ours. 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."

Obama's new $450 billion job plan would cost a little more than half of his initial economic stimulus package in 2009. That plan failed to deliver on the White House's promise to push the unemployment rate below 8 percent.

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These jobs speeches have become something of an annual tradition for the president. In December 2009, nearing the end of his first year in office, Obama gave a jobs speech in Pennsylvania after visiting metal workers in Allentown. In 2010 he tried another jobs speech, this time after visiting a clean jobs training program at a community college in Elyria, Ohio.

But these past speeches have not motivated the nation's job creators to start hiring: 28 states posted unemployment rate increases in the Bureau of Labor Statistics latest August jobs report. Consumer prices have risen 3.6 percent over the last 12 months, and 2011 is on pace to become the worst year for home sales in 14 years.

With inflation spiking the cost of doing business and the stagnant housing market preventing the crucial manufacturing base from expanding, the national unemployment rate remains flatlined at 9 percent. Relief does not seem near: The Congressional Budget Office predicts that the jobless rate will top 8 percent until 2014.

This is why many of the nation's small business owners and the millions of unemployed likely do not expecting any economic miracles in the aftermath of Obama's latest jobs speech.

Republicans in Congress mostly are supportive of one element in the president's newest plan: additional payroll tax cuts. The Social Security payroll tax for individuals has been temporality cut from 6.2 percent to 4.2 percent for this year. Obama on Thursday proposed to increase the cut to 3.1 percent for workers and extend the payroll tax cut to employers. Businesses that hire more workers will owe no Social Security tax on payroll increases up to $50 million under the plan. The president also proposed a $4,000 tax credit for businesses that hire workers who have been out of work for more than six months.

House Speaker John Boehner gave a tepid response to Obama's much-hyped speech. "The proposals the president outlined tonight merit consideration," Boehner, R-Ohio, said in a statement. "We hope he gives serious consideration to our ideas as well. It's my hope that we can work together to end the uncertainty facing families and small businesses, and create a better environment for long-term economic growth and private-sector job creation."

But other congressional Republicans criticized Obama more harshly for not bringing anything new to the table.

"Much of the speech felt like the movie Groundhog Day," said Republican Study Committee Chairman Jim Jordan.

Congressional conservatives remain frustrated that, while Obama admits the unemployment situation in America has reached crisis level, the president is still unwilling to abandon his belief that more federal spending and regulations remain the best ways to solve the problem.

His newest job plan would spend $60 billion for infrastructure projects, $30 billion on school construction, and $15 billion on the rehabilitation of vacant homes and businesses. It would pour taxpayer dollars into hiring more teachers, police, and firefighters. The president also called for a one-year extension of unemployment insurance and other job benefits totaling $62 billion.

"Obama Stimulus One failed, and so would Stimulus Two," said Tim Huelskamp, a freshmen congressman from Kansas and a member of the Committee on the Budget.

Senate Republicans are equally unimpressed: "$800 billion didn't create jobs," said Sen. Marco Rubio, R-Fla. "How is $447 billion going to create jobs?"

But the biggest criticism of Obama's speech centered on his unwillingness to specify how this second stimulus would be paid for. Instead, Obama is asking the new congressional super committee on the debt to find additional savings to cover the newest jobs proposals. This 12-member panel, which just started meeting this week, is now being tasked with increasing by $447 billion its original ambitious target of finding $1.5 trillion in budget cuts.

"It appears President Obama is once again abdicating responsibility in paying for his plans," said Sen. Rob Portman, R-Ohio, a member of the deficit reduction committee.


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