Signaling his exasperation with a lack of congressional action in aiding the U.S. economy, President Obama Thursday night gave a strongly delivered speech that laid out his modest vision for the American Jobs Act, a $447 billion plan that he said would create employment without raising taxes.
At times sounding like he was back on the presidential campaign trail, Obama proposed a jobs act that would provide a tax break for companies who hire new workers and cut payroll taxes in half for every small business and working American.
The jobs act proposes to be fully paid for as part of Obama’s long-term deficit reduction plan. The President said that “in the coming days” he would release a detailed plan that showed how he could do that while achieving the additional reduction needed to meet the broader goal of stabilizing U.S. debt.
“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,” said Obama in his address to a joint session of Congress.
Obama repeatedly urged lawmakers to “pass this jobs bill,” noting that 50 House Republicans have already proposed the same payroll tax cuts. “Pass this jobs bill, and companies will get a $4,000 tax credit if they hire anyone who has spent more than six months looking for a job,” he said.
A Dig at Republicans
In a clear dig at conservative Republicans in Congress who have consistently refused to compromise on issues such as raising taxes or the debt ceiling, Obama derided lawmakers who might allow a $1,500 middle class tax cut to expire next year. “I know that some of you have sworn oaths to never raise any taxes on anyone for as long as you live,” he said. “Now is not the time to carve out an exception and raise middle-class taxes, which is why you should pass this bill right away.”
Immediately following Obama’s address, House Speaker John Boehner (R-Ohio) issued a surprisingly conciliatory statement suggesting that Republican leadership—if not freshmen Congress members from the Tea Party—are ready to compromise on a bill.
“The proposals the President outlined tonight merit consideration,” Boehner said. “American families and small businesses are hurting, and they are looking for the White House and Congress to seek common ground and work together to help get our economy back on track. Republicans have laid out a blueprint for economic growth and job creation—our Plan for America’s Job Creators—that focuses on one thing: removing government barriers to private-sector job growth.”
Markets Stumble on Friday
Markets on Friday were glum, reflecting worries about Europe’s debt woes as well as a lack of confidence that Obama’s jobs bill can turn the U.S. economy around. The Dow Jones industrial average and S&P 500 closed down more than 2.5%. The 10-year Treasury bond was yielding 1.93% and gold traded higher, up 0.14%, at $1,857 per ounce.
Even before Obama spoke, wealth managers were skeptical about whether his jobs act would benefit investors.