Bloomberg News

Obama, Facing Broad Job Plan Defeat, Eyes Piecemeal Approach

October 11, 2011

(Adds quote from Obama in second, fourth paragraphs.)

Oct. 11 (Bloomberg) -- President Barack Obama said that if lawmakers won’t pass his entire $447 billion jobs package it may be broken up into individual provisions that can get through Congress.

“I don’t know how Congress will respond to the overall package, but our expectation is, is if they don’t pass the whole package, we’re going to break it up into constituent parts,” Obama said as he met with his council on jobs and competitiveness in Pittsburgh.

The Senate appears poised to block the president’s full plan later today amid opposition from Republicans and some Democrats who object to spending provisions and tax increases to help offset its cost. Democrats have 53 seats in the chamber, and 60 votes are needed to begin debate.

“This is a moment of truth for the U.S. Senate,” Obama told workers at the International Brotherhood of Electrical Workers Local No. 5 Training Center in Pittsburgh. “Today’s the day when every American will find out where their senators stand on this jobs bill.”

Two administration officials today outlined parts of the plan that might be pursued individually, such as cuts in payroll taxes for workers and employers, renewed unemployment benefits for the jobless, small business tax cuts, and spending for infrastructure.

Pressure on Republicans

White House officials anticipate political pressure on Republicans will help push through some of the smaller measures, because Republicans won’t want to return home at year’s end without some sign of progress on the jobs front, said the aides, who were not authorized to speak publicly. The officials also said elements of Obama’s proposal might be included in proposals from a congressional supercommittee given the task of identifying $1.5 trillion in deficit reduction over 10 years.

The aides said the jobs plan will become a prime focus for Obama as he seeks to set the stage for his 2012 re-election bid. They said he intends to underscore the lack of a significant counterproposal from Republicans in Congress as an alternative to Obama’s ideas for lowering the nation’s 9.1 percent unemployment rate.

Obama proposes to cut payroll taxes for workers and employers by half, extend jobless benefits, provide aid to states for schools and emergency workers and boost spending on public works projects such as roads and bridges. He also would provide tax breaks for employers to hire the unemployed.

Millionaire Surtax

The plan to be considered by the Senate would be financed by a surtax on people earning at least $1 million a year, which the U.S. Congressional Budget Office said would raise $453 billion. Senate Democratic leaders proposed that offset to replace Obama’s initial plan for revenue increases that ran into resistance from some Democrats.

Obama proposed capping itemized deductions for individuals earning more than $200,000 a year and couples earning more than $250,000. He also proposed raising taxes on private equity firm managers, real estate investors and venture capitalists, and ending oil and gas subsidies. Obama has said he would accept the surtax.

Obama’s plan also faces hurdles in the House. Republicans, who hold the majority, oppose the tax increases, and party leaders there say it adds spending in many areas already bolstered in 2009’s economic stimulus measure, which they say wasn’t effective.

House Republican leaders say some of Obama’s ideas, such as payroll tax cuts, are worth considering, though they object to the spending proposals and oppose raising other taxes to pay for them.

Maryland Representative Steny Hoyer, the second-ranking Democrat in the House, urged Senate Democrats to give united support for today’s vote to allow debate on Obama’s jobs bill. Failure would undermine the president’s message that Republicans are blocking the plan, Hoyer, of Maryland, said at his weekly press conference in Washington.

--With assistance from Roger Runningen and James Rowley in Washington. Editors: Laurie Asseo, Joe Sobczyk

To contact the reporters on this story: Laura Litvan in Washington at llitvan@bloomberg.net; Margaret Talev in Pittsburgh at mtalev@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net


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