To answer that crisis, Obama was proposing what he called the American Jobs Act, which he said would cut payroll taxes in half for working Americans and most small businesses; boost spending on public works, like roads, by $105 billion; and make permanent a temporary cut in the individual tax rate, which was reduced from 6.2 percent to 4.2 percent for this year only.There were several constituencies he was speaking to. First, he had to craft a proposal for the public to hear and see that he's trying to do something. He had to propose something that Congressional Democrats might be able to work with. But then he has to deal with the reality that a jobs program and the funding for it will be dominated by the House Republicans, and they're in no mood to give the President anything, even if it means that people will remain out of work and that they want to see offsetting budget cuts.
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Obama calculated that the "typical working family" would get a $1,500 tax cut and that small companies with 50 employees would save $80,000, which he said would "provide a jolt to an economy that has stalled."
Obama didn't say how much the plan would cost, but advisers told NBC News it would run about $450 billion. Obama said he hopes to pay for it by closing corporate tax "loopholes" and by raising taxes on wealthier Americans.
"We need a tax code where everyone gets a fair shake and everybody pays their fair share," he said. "And I believe the vast majority of wealthy Americans and CEOs are willing to do just that if it helps the economy grow and gets our fiscal house in order."
Earlier this summer, Republicans forced a partial government shutdown over their refusal to raise any taxes at all, but Obama told them they should "pass this jobs plan right away," because "the millions of Americans who are watching right now, they don't care about politics. They have real-life concerns."
The President attempted to speak to the public directly, but just how many people tuned him out, expecting the ongoing political stalemate to block anything from being accomplished. The thing is that the President is right - and Republicans are going to have to show more than merely blocking Obama to their constituents as a policy choice if they have a chance at winning in 2012. They need to show tangible proof of leadership and accomplishments to take home to their constituents.
Claiming that they blocked the President from enacting tax hikes may help keep the faithful in line, but it does nothing for the millions who are out of work or are in marginal jobs.
That said, did what the President propose have merit?
Absolutely. We do need to spend money on improving infrastructure. Maintenance costs money, but we can't keep treading water. We need to do more. Spending on infrastructure is a down payment on the future - not only improving current infrastructure, but putting a better infrastructure in place for future use. That goes to things like the power grid, rail systems, highways, bridges, and tunnels - but such projects should be focused on areas where the most benefit will be gained for the dollar (a cost benefit analysis and not merely dividing out monies based on what politicians can be bought off).
The speech then went on to discuss the merits of reforming Medicare and Medicaid to improve the solvency and long term outlook for those programs.
Eliminating tax loopholes is a good thing, except when it's your loophole they want to close. Such is the case when dealing with energy companies and other major corporations that can muster lobbyists to thwart such actions.
I think speaking past Congress to the public was a good idea, but it wont be enough to get Congress to act in a responsible way. The lure of elections in 2012 is far too strong and this crop of Republican leaders is more interested in expanding their political power than putting forth a responsible economic program of their own. Instead, they believe that the way to deal with the fiscal crisis is to pull the rug out of the safety net that protects millions of Americans.
That's not fiscally prudent nor responsible.