On Thursday, in a rare speech to a joint session of Congress, President Barack Obama proposed a plan to stimulate the economy. The $447 billion package, known as the American Jobs Act, includes $263 billion in tax cuts and $194 billion in new spending. The plan is meant to create jobs and boost the struggling U.S. economy, where unemployment remains high and 14 million people are still out of work.
“The purpose of the American Jobs Act is simple,” Obama said to Congress during the televised address. “To put more people back to work, and more money in the pockets of those who are working.” The President will officially send the full bill to Congress later this month.
Obama’s biggest proposal calls for lowering the Social Security payroll tax for workers. The Social Security system collects money from working Americans and pays out to people who are retired or disabled. Obama says the additional payroll tax cut would save an average family making $50,000 a year about $1,500. The plan also includes extra incentives for businesses that hire new workers or that give raises. Small businesses would receive tax breaks for hiring veterans or workers who have been unemployed for more than six months.
Obama also asked for more funding for highways, schools and other construction projects, and for money to help states keep and hire teachers and police officers. The White House says the proposal would prevent about 280,000 teacher layoffs and modernize 35,000 schools.
A Political Battle
During his speech, Obama urged lawmakers to act quickly in passing the bill. “This plan is the right thing to do right now,” Obama told Congress. “You should pass it. And I intend to take that message to every corner of this country.”
But the President may face a battle in getting the full act passed. While Republicans are traditionally in favor of tax cuts, they don’t think the government should be increasing spending when the national debt is so high. "The proposals the President outlined tonight merit consideration," Republican Speaker of the House John Boehner said. “We hope he gives serious consideration to our ideas as well.” Obama says the plan would be paid for completely and would not add to the national debt, but he has yet to release the details.
Speaking at the University of Richmond on Friday, in Virginia, the President stood firmly by his newly unveiled plan. "I'm asking all of you to lift up your voices," he said to the crowd. "I want you to tell your congressperson the time for gridlock and games is over, the time for action is now."