President Barack Obama, seeking to rescue a faltering US economy and his own re-election prospects, began an uphill battle today to win Republican support for a $447 billion jobs plan.
The proposals, weighted toward tax cuts for workers and businesses, was carefully crafted to appeal to middle-class voters who gravitate toward the political center.
A day after unveiling his ideas on Capitol Hill, Mr Obama will pitch them directly to Americans during a visit to a Virginia university, kicking off a months-long campaign to promote the package across the country.
The White House sees the plan, a mix of payroll tax cuts and spending to upgrade roads, bridges and school buildings, as the best hope for reducing the 9.1 per cent unemployment rate that threatens Mr Obama's presidency and addressing what he called a national crisis.
Early estimates suggested it could lift US growth by 1 to 3 percentage points in 2012, lower the unemployment rate by at least half a percentage point and add well over one million jobs. Mark Zandi, chief economist at Moody's Analytics and a former adviser to 2008 Republican presidential contender John McCain, said it could add 1.9 million jobs.
Mr Obama hopes he can rally enough popular support to pressure Republicans to get behind the plan so that it can start to lower unemployment before the November 2012 presidential vote.
"The next election is fourteen months away," Mr Obama told a rare joint session of US Congress yesterday. "And the people who sent us here - the people who hired us to work for them - they don't have the luxury of waiting fourteen months."
Financial markets showed little reaction to the speech, due to doubts over whether it could clear a divided Congress. US stock index futures fell slightly early today.
There were initial signs that Republican congressional leaders may be ready to find at least some common ground on the plan, despite their opposition to much of Mr Obama's agenda over the past year.
The Republican speaker of the House of Representatives, John Boehner, said Mr Obama's ideas "merit consideration."
Eric Cantor, the second ranking Republican in the House whose state Mr Obama will visit today, said the payroll tax cuts were "something that will be a part of the discussions" and described "a lot of room for us to work together." "I heard plenty in the president's speech last night where there is a lot of room for commonality and we can get something done quickly," Mr Cantor told CNN this morning.
He said Republicans were unconvinced about the need for an infrastructure bank, another component of Mr Obama's jobs plan, but could accept other aspects, including tax cuts.
Top Democrats said they hoped Republicans, whose top issue is debt and deficit reduction, would be willing to accept the public works programs and funds to hire teachers that round out Mr Obama's program, along with mortgage refinancing help.
"If we piecemeal it, if we just take little pieces, frankly I'm not sure that will do the job," Democratic representative Steny Hoyer of Maryland said on CNBC.
Bleak jobs figures and other recent data have raised fears the US economy could slide into another recession.
While the economy's woes have sent Mr Obama's popularity tumbling to new lows, Republicans are well aware they could suffer political fallout too if Obama succeeds in painting them as obstructionists in the effort to fix the jobs problem.
US vice president Joe Biden said this morning that funds from the jobs plan would filter out into the economy in three to six months after it passes and could help assuage companies that have been reluctant to spend their money.
"This is all designed to change the confidence level and attitude of people out there," he told NBC.
Republicans have hammered Mr Obama for months over what they viewed as weak leadership on the economy. And in a grim sign for the president's re-election prospects, Democrats have increasingly begun to sour on his economic stewardship too.
The unexpectedly large $447 billion price tag for Mr Obama's jobs plan was welcomed by powerful constituencies such as labor unions whose support Obama needs in his re-election drive.
The package and the feisty tone in Mr Obama's speech were welcomed by Richard Trumka, president of the influential AFL-CIO labor federation, who sat with first lady Michelle Obama in her box during the speech.
Mr Trumka said afterward Mr Obama had made clear he was "willing to go to the mat to create new jobs on a substantial scale."
Reuters
