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Obama Proposes $447 Billion Economic Plan

President Barack Obama proposed a nearly $450 billion economic plan Thursday, Sept. 8, 2011. (AP Photo/Charles Dharapak)

WASHINGTON (AP) -- President Barack Obama is proposing an ambitious, $447 billion jobs plan to Congress whose key feature is a sizable 2012 payroll tax cut for workers and employers. The package represents Obama's response to stubbornly high unemployment and a weak economic recovery.

The president is unveiling his plan to a joint session of Congress.

In its size, the plan matches the top annual spending of the stimulus bill that Congress approved in 2009. That $825 billion plan was spent over three years. Most of the new package would be spent in 2012.

Obama's proposal calls for cutting payroll taxes form the current 4.2 percent to 3.1 percent for workers, and from 6.2 percent to 3.1 percent for businesses. Businesses also would get an additional payroll tax holiday for new hires.

He is proposing spending $105 billion on public works projects as part of his package to spur job growth. He also is recommending that Congress renew nearly $50 billion in unemployment benefits for about 6 million people at risk of losing their jobless insurance.

In addition, the plan proposes spending $35 billion so that states and local governments can prevent layoffs of teachers and emergency services personnel.

Obama's plan would slash the Social Security payroll tax both for tens of millions of workers and for employers, too. For individuals, that tax has been shaved from 6.2 percent to 4.2 percent for this year but is to go back up again without action by Congress. Obama wants to keep it and deepen the cut to 3.1 percent for workers.

"This plan is the right thing to do right now," Obama said. "You should pass it. And I intend to take that message to every corner of this country."

Obama did not venture an estimate as to how many jobs his plan would create. He promised repeatedly that his plan would be paid for, but never said how, pledging to release those details soon.

Repeatedly urging lawmakers to pass the plan quickly, he criticized fiercely partisan climate in Washington.

"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," Obama said.

For every time he told lawmakers to "pass the bill" -- something he repeated over and over -- Democrats cheered while Republicans sat in silence.

Tax cuts amounted to the broadest part of Obama's proposal -- in essence, a challenge by the Democratic president to congressional Republicans to get behind him on one of their own cherished economic principles or risk the wrath of voters for inaction. The tax cuts alone would amount to roughly $250 billion.

The president said deepening the payroll tax cut would save an average family making $50,000 a year about $1,500 compared to what they would if Congress did not extend the current tax cut.

"I know some of you have sworn oaths to never raise any taxes on anyone for as long as you live," Obama said, a reference to the conservative Tea Party influence on many House Republicans. "Now is not the time to carve out an exception and raise-middle class taxes, which is why you should pass this bill right away."

Obama's jobs plan put a special emphasis on the long-term unemployed - those who have been out of work for six months or more. He repeated his calls for a one-year extension of unemployment insurance in order to prevent up to 6 million people from losing their benefits, and he proposed a $4,000 tax credit for businesses that hire workers who have been out of work for more than six months.

A key part of Obama's approach was to appeal to the lawmakers in front of him to pass a deal, and to position them for blame for inaction should the jobs plan fall short.

"The next election is 14 months away," he said. "And the people who sent us here - the people who hired us to work for them - they don't have the luxury of waiting 14 months. ... They need help, and they need it now."

One last thing…
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