Will $447 Billion Rescue the Economy?

In his Sept. 8 address to a joint session of Congress, President Barack Obama had an urgent message for lawmakers: “Pass this jobs bill.”

It was a phrase he repeated a dozen times during the course of his roughly 45-minute address.

“I am sending this Congress a plan that you should pass right away,” Obama said. “It’s called the American Jobs Act. 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. Everything.” 

So, what is in the bill? According to President Obama, more jobs for construction workers, more jobs for teachers, more jobs for veterans and more jobs for the long-term unemployed. The bill will also provide a tax break for companies who hire new workers, reduce payroll taxes and, Obama said, “provide a jolt to an economy that has stalled, and give companies confidence that if they invest and if they hire, there will be customers for their products and services.”

In pitching the plan to Congress, the President also said the American Jobs Act would modernize at least 35,000 schools.

“It will put people to work right now fixing roofs and windows, installing science labs and high-speed Internet in classrooms all across this country,” he said.

The jobs bill also includes a promise to rehabilitate homes in communities hardest hit by foreclosures and a vow to “jumpstart thousands of transportation projects all across the country.” 

With a $447 billion price tag, the promise of new jobs does not come cheap. The President said the bill will be paid for by cuts in government spending.

“The agreement we passed in July will cut government spending by about $1 trillion over the next 10 years,” Obama said. “It also charges this Congress to come up with an additional $1.5 trillion in savings by Christmas. Tonight, I am asking you to increase that amount so that it covers the full cost of the American Jobs Act. And a week from Monday, I’ll be releasing a more ambitious deficit plan -- a plan that will not only cover the cost of this jobs bill, but stabilize our debt in the long run.”

President Obama offered some details regarding his “ambitious deficit plan."

“In addition to the trillion dollars of spending cuts I’ve already signed into law, it’s a balanced plan that would reduce the deficit by making additional spending cuts, by making modest adjustments to health care programs like Medicare and Medicaid, and by reforming our tax code in a way that asks the wealthiest Americans and biggest corporations to pay their fair share,” he said. 

Obama acknowledged that passing the jobs act may be difficult given the current political climate.

“And maybe some of you have decided that those differences are so great that we can only resolve them at the ballot box,” he told the assembly of lawmakers. “But know this: The next election is 14 months away. And the people who sent us here -- the people who hired us to work for them -- they don’t have the luxury of waiting 14 months. Some of them are living week to week, paycheck to paycheck, even day to day. They need help, and they need it now.”

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