Obama asks for $450 billion to lift economy

WASHINGTON -- President Barack Obama unveiled a larger-than-expected $450 billion plan Thursday night to boost jobs and put cash in the pockets of Americans, urging Republicans to embrace an approach heavy on tax cuts. Obama repeatedly challenged Congress to act swiftly.

The newest and boldest element of Obama's plan would slash the Social Security payroll tax both for tens of millions of workers and for employers. 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 deepen the cut to 3.1 percent for workers.

"This plan is the right thing to do right now," Obama said after a divided body rose in warm unison to greet him. "You should pass it. And I intend to take that message to every corner of this country."

Open to discussion but making no promises, Republican House Speaker John Boehner said Obama's ideas would be considered but the president should give heed to Republicans' as well.

"It's my hope that we can work together," he said.

In his televised address to Congress, Obama sought to provide a jolt for the economy, still staggering on his watch, and for his own standing at one of the lowest marks of his presidency. He put forth a jobs plan that he hopes can get bipartisan support and spur hiring in a nation where 14 million people remain out of work and the jobless rate is stuck at 9.1 percent. Public confidence in his stewardship of the economy is eroding.

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

Obama also would apply the Social Security payroll tax cut to employers, halving their taxes to 3.1 percent on their first $5 million in payroll. Businesses that hire new workers or give raises to those they already employ would get an even bigger benefit: On payroll increases up to $50 million they would pay no Social Security tax.

Obama also proposed spending to fix schools and roads, hire local teachers and police and to extend unemployment benefits. He proposed a tax credit for businesses that hire people out of work for six months or longer, plus other tax relief aimed at winning bipartisan support in a time of divided government.

Under soaring expectations for results, Obama sought to put himself on the side of voters who he said could not care less about the political consequences of his speech.

"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.

His aim Thursday night was to put pressure on Congress to act -- and to share the responsibility for fixing the economic mess that is sure to figure in next year's elections. For every time he told lawmakers to "pass the bill" -- and he said 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.

Obama 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."

Politics shadowed every element of Obama's speech. He implored people watching on TV to lobby lawmakers to act. He did the same thing before his speech in an email to campaign supporters, bringing howls of hypocrisy Republicans who wondered why Obama was telling them to put party above country.

No incumbent president in recent history has won re-election with the unemployment rate anywhere near the current 9.1 percent.

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."

Administration officials bristle whenever critics of their original stimulus plan note that it did not live up to the job creation estimates the White House issued in 2009. As a result, the White House is leaving it to outside economists to render their verdict on the new plan.

Mark Zandi, one of several economists asked by the White House to evaluate the president's proposal ahead of his speech, said that if enacted it would add 1.9 million jobs and reduce the unemployment rate by one percentage point. Zandi, chief economist for Moody's Analytics, said the expanded payroll tax cut would be responsible for the most increase in hiring, adding about 750,000 jobs. The tax cut for employers, he said, would add about 300,000 new jobs

As to paying for it, Obama will ask a special debt panel in Congress to find enough savings to cover the costs of his ideas. He says he'll release specifics a week from Monday along with a proposal to stabilize the country's long-term debt. Among them: raise taxes on the wealthy, an idea Republicans have already rejected.