Obama’s Jobs Plan To Cost $300 Billion In Tax Cuts

President Barack Obama’s jobs package to be unveiled on Thursday will clock in at $300 billion dollars.

President Barack Obama speaks during a Labor Day speech at Detroit's Renaissance Center, headquarters of General Motors. Photo: Mike Huggler/Flickr

President Barack Obama is expected to propose $300 billion in tax cuts and federal spending Thursday night to get Americans working again.

According to people familiar with the White House deliberations, two of the biggest measures in the president’s proposals for 2012 are expected to be a one-year extension of a payroll tax cut for workers and an extension of expiring jobless benefits. Together those two would total about $170 billion.

The White House is also considering a tax credit for businesses that hire the unemployed. That could cost about $30 billion. Obama has also called for public works projects, such as school construction. Advocates of that plan have called for spending of $50 billion, but the White House proposal is expected to be smaller.

The address being written by chief White House speechwriter Jon Favreau looms as one of the most important of Obama’s presidency. Unemployment stands at 9.1% and the fragile economic recovery appears to have stalled.

Obama also is expected to continue for one year a tax break for businesses that allows them to deduct the full value of new equipment. The president and Congress negotiated that provision into law for 2011 last December.

Republicans are already lining up in opposition to Obama’s plan — even before they have been briefed on its contents — with Senate Minority Leader Mitch McConnell saying he is certain it will be “more of the same” failed policies.

McConnell said Republicans “will spend the next weeks and months arguing in favor of a robust legislation agenda aimed at blocking or repealing some of the most pernicious rules and regulations.”

House Majority Leader Eric Cantor already ruled out a “second failed stimulus” in a joint letter to Obama with Speaker of the House John Boehner and given the GOP’s focus on deficits, a plan of this magnitude may be a tough sell.

In a letter to Obama on Tuesday, House Speaker John Boehner and Majority Leader Eric Cantor outlined possible areas for compromise on jobs legislation.

In their letter to Obama, Boehner and Cantor wrote that neither party would win all it wants from the coming debate over jobs legislation. “We should not approach this as an all-or-nothing situation,” they said, striking a conciliatory tone in the first moments of a post-summer session of Congress.

But it was unclear what, if any, concessions they were prepared to make.

“We are not opposed to initiatives to repair and improve infrastructure,” they wrote, saying they favor repeal of a current requirement for 10 percent of highway funds to be spent on items such as museums or bike trails.

“Obviously, achieving bipartisan agreement on these and other initiatives requires more than just one side declaring a proposal to be ‘bipartisan,'” wrote Boehner and House Majority Leader Eric Cantor.

At the same time they did not say they would support any additional funding for construction, and aides declined to provide any additional details.

Senate Majority Leader Harry Reid said last month’s unemployment report – it showed a painfully persistent 9.1 percent jobless rate and no net gain of jobs – “should be a wakeup call to every member of Congress.”

Briefing reporters Tuesday, White House Press Secretary Jay Carney said that impartial economists would conclude that the new jobs plan would “have a direct, quick and positive impact on the economy and job creation.”

Carney also said the package would be “paid for,” not financed through deficit spending.

The Obama administration forecast that the $800 billion stimulus would yield sustained economic growth, while lowering the nation’s unemployment rate below 8 percent.

Mitt Romney chose Nevada, where unemployment stood at a nationwide high of 12.9 percent in July, for a campaign speech in which he outlined numerous proposals to create jobs.

He called for lowering the maximum corporate tax from 35 percent to 25 percent and abolishing the tax on dividends and investment earnings for anyone making less than $200,000 a year.

He also said any new government regulation that raises costs for businesses should be accompanied by other steps to reduce the burden by an identical amount.

“America should be a job machine, jobs being created all the time,” he said. [via Huff Post, Business Insider and Los Angeles Times]

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