News / USA

Obama Calls for 'Balanced Plan' of Spending Cuts, Tax Reform

President Barack Obama delivers a speech to a joint session of Congress at the Capitol in Washington, Sept. 8, 2011
President Barack Obama delivers a speech to a joint session of Congress at the Capitol in Washington, Sept. 8, 2011

President Barack Obama has urged a joint session of the U.S. Congress to end what he calls the "political circus" in Washington, and move rapidly to approve job creation legislation he is sending to Capitol Hill.

The president designed his speech to substantially raise the stakes in his struggle with Republicans over how to address stubborn 9.1 percent unemployment, and continue to fix the nation's fiscal woes.

Urged by fellow Democrats to put forward the boldest possible proposals, he unveiled a legislative package estimated at $450 billion, including extended payroll tax cuts for workers and employers, and incentives for businesses to hire.

As a spending bill, what he is calling The American Jobs Act would be considered and voted on first by the Republican-controlled House of Representatives.

Mr. Obama says it would provide a jolt to a stalled economy.

"I am sending this Congress a plan that you should pass right away.  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," Mr. Obama said.

Mr. Obama's speech came after months of difficult political battles with Republicans over how to lower government deficits and the $14 trillion national debt.

A compromise this past July provided for $1 trillion in spending cuts linked to raising the national debt ceiling, but also led to a harmful downgrading of the government's credit rating.

Mr. Obama made a point of underscoring past bipartisan support for proposals in his jobs package. And he called on Democrats and Republicans to end the political warfare to put people back to work and the economy back on track.

"The people of this country work hard to meet their responsibilities.  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; whether we can restore some of the fairness and security that has defined this nation since our beginning," Mr. Obama said.

Key aspects include proposals to rebuild and modernize U.S. infrastructure and schools, financial aid to cash-poor state and local governments, job training to help the long-term unemployed, and steps to encourage hiring of military veterans.

Mr. Obama said the wealthiest Americans and large corporations should pay more through elimination of tax loopholes, and repeated his call for a balanced plan that would include "modest adjustments" in expensive government health care programs.

The president plans to send Congress a more ambitious plan in 10 days that will include the cost of his jobs proposal and steps to stabilize the U.S. debt in the long run.

And he is asking the bipartisan congressional committee created by the debt and deficit deal to find more than the $1.5 trillion in additional savings it is tasked with identifying.

In initial reaction, Republican House Speaker John Boehner said Mr. Obama's proposals "merit consideration" adding that he hopes the president gives serious consideration to Republican proposals. Other Republicans had harsher assessments.

Republican Senator Orrin Hatch voiced skepticism, but said he would wait for details of the plan.

"I'm going to give it a good look and hopefully support the president, but right now it looks to me like more of the same," Hatch said.

Statements from key Democratic leaders praised the president, saying he had laid out reasonable proposals to tackle unemployment that will be paid for as part of broader debt and deficit reduction efforts.

In his address, Mr. Obama said while some lawmakers might feel differences can be resolved only through the ballot box, Americans "living paycheck to paycheck" need a Congress that will act now.

"Know this:  the next election is fourteen 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 fourteen months," the president said.

The president said he will be traveling in coming weeks to urge public support for his jobs proposal, and to urge Americans to tell Congress that "doing nothing is not an option."

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