When is a stimulus package not a stimulus package? When it's been paid for. At least that's what United States President Barack Obama hoped to underscore when he unveiled a $447-billion plan before the U.S. Congress, a combination of tax code and expenditure reforms aimed at creating an undefined number of jobs and jumpstarting the ailing U.S. economy.
“It will 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. You should pass this jobs plan right away,” the President said on Thursday night.
In a move that surely bolstered his centrist credentials, the President sought to woo his truculent Republican opposition in Congress through what the White House has labelled the American Jobs Act, a proposal that remained silent on actual job-creation projections and details of the financing mathematics.
What is known is that the plan, which was obviously forged in the cauldron of the 2012 presidential election, included a “centrepiece” $240-billion payroll tax cut for employers and employees; a $50-billion proposal to invest in highways, railroad and airport modernisation; a $10-billion infusion to Mr. Obama's idea of a national infrastructure bank; a $35-billion initiative to stem the layoffs of nearly 280,000 public sector workers; a $30-billion project to modernise 35,000 public schools; a $49-billion scheme to extend insurance payments for the long-term unemployed; and a “returning heroes” tax credit to “spur hiring of Iraq and Afghanistan war veterans”.
While he pleaded no fewer than 17 times that Congress should “pass this bill,” there was little doubt that Mr. Obama had deftly manoeuvred to put Republicans on back-foot.
His speech in the Capitol saw him concede to some of their demands such as expenditure reform in Democrat-favoured Medicare; yet he equally pressed them to yield ground on their top priority — blocking any form of tax hike on the wealthiest Americans.
Taking a dig at continuing partisan logjam on Capitol Hill, Mr. Obama also warned the U.S. Congress that it was short on time.
While some legislators may have decided that party differences could only be resolved them at the ballot box, he warned, “The next election is 14 months away... the people who hired us to work for them... don't have the luxury of waiting 14 months. Some of them are living week to week, paycheque to paycheque, even day to day. They need help, and they need it now.”
In particular Mr. Obama kept up the pressure on Republicans, presently under the sway of the fiscally ultra-conservative Tea Party, to stop insisting on tax loopholes for oil companies and tax breaks for millionaires and billionaires.
“This isn't political grandstanding... [or] class warfare. This is simple math... [and] these are real choices,” said Mr. Obama.
For all its bells and whistles, however, the American Jobs Act has received a lukewarm, mixed response from different constituents.
Republicans such as Senate Minority Leader Mitch McConnell called the initiative “a re-election plan,” saying, “It's time the President starts thinking less about how to describe his policies differently and more time thinking about devising new policies.”
Even liberal economist and Nobel laureate Paul Krugman criticised the scale of the proposals, arguing that the “lingering effects of the housing bust and the overhang of household debt from the bubble years are creating a roughly $1 trillion per year hole in the U.S. economy, and this plan... would fill only part of that hole.”
