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U.S. President Barack Obama arrives to address a joint session of Congress in Washington on Thursday. (Kevin Lamarque/Getty Images)
U.S. President Barack Obama arrives to address a joint session of Congress in Washington on Thursday. (Kevin Lamarque/Getty Images)

Konrad Yakabuski

Obama pitches sprawling jobs package Add to ...

President Barack Obama is asking Republicans in Congress to allow him to deliver another jolt of major fiscal stimulus to the U.S. economy before it teeters into a double-dip recession.

In a speech to a rare joint session of Congress, Mr. Obama called on legislators to end the corrosive partisan bickering that has sent voter faith in government to historic lows, and pass his $447-billion (U.S.) jobs plan.

“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,” Mr. Obama said Thursday evening in a 35-minute address that at times sounded like a scolding aimed squarely at Republicans in Congress.

The jobs package, which is much larger than the White House had been hinting at in recent days, aims to take an axe to an unemployment rate that has been stuck above 9 per cent since May of 2009.

The package builds on a two percentage point cut to the 6.2-per-cent Social Security tax for employees that had been set to expire on Dec. 31. The President wants to extend the cut for one more year and increase it by a percentage point. That measure alone would cost about $175-billion and leave about $1,500 in the pockets of a typical family.

Mr. Obama also wants to cut payroll taxes in half for small businesses and give them a $4,000 tax credit if they hire someone who has been out of work for more than six months.

In addition, the American Jobs Act would extend unemployment benefits for the long-term unemployed, kick-start infrastructure spending and school renovations and provide direct aid to hard-up state governments so they can keep teachers, police and firefighters on the job.

The President’s speech represented his attempt to recapture the initiative from a Congress that has been singularly fixated on spending cuts since Republicans made huge gains in midterm elections nearly a year ago.

Except for a burst of appreciation following the killing of Osama bin Laden, Mr. Obama has seen his approval rating sink steadily since 2010 as voters grow increasingly unhappy with his handling of the economy.

But while voters largely bought into the Republican narrative of Mr. Obama’s first $825-billion stimulus package as a failure, the President signalled he would fight just as hard to see this one enacted.

He insisted that his proposals would be deficit neutral – at least in the longer term, adding he would release the specifics of how he proposes to pay for his stimulus plan on Sept. 19.

“Regardless of the arguments we’ve had in the past, regardless of the arguments we’ll have in the future, this plan is the right thing to do right now,” an unusually combative Mr. Obama declared. “You should pass it. And I intend to take that message to every corner of this country.”

Republicans leaders decided to forgo their right to a formal televised response to Mr. Obama’s speech, figuring most viewers would have already turned the channel to the National Football League season opener.

“The American people shouldn’t be forced to watch some politician they don’t want to listen to when most of them would rather watch a football game,” Speaker John Boehner explained before Mr. Obama’s speech.

Mr. Boehner hinted there might be a basis for agreement with the White House on at least some of the proposals: “The American people want us to find common ground.”

However, most Tea Party members of Congress are likely to oppose the entire plan. A handful even refused to attend Mr. Obama’s speech.

Still, during town hall meetings held during the August recess, members of Congress got an earful from voters who were disgusted by the intransigence in Washington during this summer’s debt-ceiling standoff.

Polls also show that job creation has surged ahead of deficit reduction as a priority among voters. A Pew Research Center survey conducted over the weekend found that the job situation was the top economic worry of 43 per cent of adults, compared with 22 per cent who chose the deficit.

The Social Security tax cut for employees is expected to draw the most support in Congress. The first two-percentage point cut was introduced for one year as part of a late 2010 deal.

Economists have been of a mixed mind about how effective it has been as a job creation measure. Workers at the lower end of the income scale are likely to spend all of the extra money, stimulating demand for goods and services. Others could just save it or use it to pay down debt.

But no president has won re-election with a jobless rate anywhere near 9 per cent since the Depression. Unless Mr. Obama thinks he can defy history – again – he needs to try everything Republicans will let him try.

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