Obama Proposes $447 Billion Jobs Plan

Last night, we reported that President Barack Obama would give his sixth address on job growth with the expectation he would touch on topics like payroll tax-cuts, unemployment benefits, infrastructure spending and government financial relief. He did address these topics by presenting a $447 billion jobs plan that proposed a mix of tax cuts and new spending.

Basics of Obama’s Job Stimulus Proposal

On Thursday night, Obama unveiled his stimulus plan stating his belief it will boost hiring and provide a jolt to the stalled economy if it becomes law. The proposal is a mix of $253 billion in cuts to current taxes and $194 billion in new spending.

The plan includes:

Tax cuts…

• Individual payroll tax cuts extension: This year, employees received a 2-percent break on their payroll taxes that pay into the Social Security system, dropping it to 4.2 percent. Obama would like to extend the cut and drop it to 3.1 percent.
• Business payroll tax cuts: He would also like to offer this reduction to businesses while waiving all payroll taxes for business that hire new workers or give workers a raise.
• Business tax credits: Obama will also provide $8 billion in credits for companies that hire workers who have been unemployed for at least six months in order to address the NUNA problem plaguing the long-term unemployed.

Spending…

• Extend unemployment benefits: With nearly 43 percent of the unemployed out of work six months or longer, Obama wants to extend the current 99 weeks for benefits, a measure that would cost $49 billion.
• Subsidized job training: Obama wants to offer the unemployed a chance to work temporarily as they build their skills and search for a new job through a program modeled after a job training program in Georgia. In the Georgia program, workers get to keep their jobless benefits and receive a stipend of up to $240 for transportation and other expenses.
• Housing help: He vowed to work with Fannie Mae and Freddie Mac to help homeowners refinance their mortgages at interest rates of around 4 percent.
• School/vacant property modernization: He also proposed to spend $25 billion to modernize at least 35,000 public schools, along with $5 billion to improve community colleges. A separate $15 billion would go toward fixing up vacant and foreclose homes and businesses.
• Summer jobs for youth: Obama wants to give hundreds of thousands of individuals between ages 16 and 24 summer jobs next year.
• Teaching and first responder jobs: The president wants $35 billion pumped into local communities to keep teachers and first responders on the job and allow for new hiring.
• Infrastructure bank: He wants to create a national infrastructure bank that would offer loans to give private-sector projects a jolt of money. The interest paid on the loans would eventually make the bank self-sufficient.
• Immediate surface transportation: Obama proposed $50 billion in immediate funding for highways, transit, rail and aviation.

Obama says his plan would be fully paid for and asked the new debt super committee to add the cost of American Jobs Act to its goal of reducing debt over the next decade. Most likely, however, financing the plan would involve making cuts to Medicaid and Medicare, as well as creating a tax reform plan “that asks the wealthiest Americans and biggest corporations to pay their fair share.”

Proposal Faces Staunch Opposition from Republicans

With several Republicans stating their intentions to boycott Obama’s speech, it’s no surprise that many are in opposition to the ideas he proposed.

However experts are now saying that because of their displeasure with the idea of new spending, his plan will have no chance of passing in the House of Representatives without making some adjustments.

Some do believe, on the other hand, that there are parts of the plan that could indeed become law and successfully support the economy in avoiding another recession.

Pamela Loprest, director of the Income and Benefits Policy Center at the Urban Institute, told CNNMoney.com, “Economically, the plan hits different places. There are different parts of the economy Obama is trying to jolt.”

She explained that his proposal is actually important during this difficult economic time. “There is no problem more urgent,” she said.