According to the Congressional Budget Office’s midyear economic analysis released last month, the unemployment rate, which was 9.1 percent in August, will decline to only 8.5 percent by the end of next year and will remain above 8 percent until 2014.
The administration official stressed that helping create jobs can’t be delayed by the kind of political wrangling that marked debate over a deal enacted last month to raise the debt ceiling and over funding the federal government through the end of the fiscal year, which was passed in April, seven months after fiscal 2011 began.
The official referred to the debt ceiling debate as “the circus that the American people witnessed in Washington this summer over the debt crisis,” a term Obama reprised during his speech.
The plan calls for cutting the payroll tax in half for all workers in 2012, building on the 2 percentage point cut passed in December, which trimmed the tax by about one-third. The proposal is expected to cost $175 billion.
Another administration official said that the December cut helped Americans as gas prices rose. “It proved to be an enormously important buffer ... for families facing higher gas and oil prices,” the official said.
The official also said the proposal would provide a tax cut of about $1,500 to a typical family earning $50,000 a year.
The plan also includes $70 billion in tax cuts to help small businesses by cutting in half the taxes paid by businesses on their first $5 million in payroll. The White House package also includes language to temporarily eliminate the payroll tax for new workers and increased wages — capped at $50 million in payroll increases. It would also extend through 2012 100 percent expensing that allows businesses to take an immediate tax deduction on investments in new plant and equipment.
The officials stressed that Republicans have in the past supported cutting the payroll tax for employers and employees.
An additional $140 billion would go toward various proposals intended to create jobs, including $50 billion for highway, transit, rail and aviation projects; $35 billion to prevent layoffs of teachers, police officers and firefighters; and $30 billion for school modernization, including $5 billion for community colleges.
An additional $62 billion would be spent to extend unemployment benefits and make changes in the program, including a plan that would allow workers who keep their jobs but work reduced hours to collect some unemployment insurance to make up the difference.
The officials would not speculate how many jobs the plan would create, in part because Republicans pummeled Democrats after they projected that the 2009 stimulus package would keep the unemployment rate from going above about 8.5 percent.
One official said that it is too difficult to accurately make that prediction and preferred to leave it to “independent economists to make their assessments.”
“We are just not going to get caught in that trap again,” the official added.
Visitors get their first look at the American Veterans Disabled for Life Memorial, which opened to the public on Monday, Oct. 6, 2014. The new memorial is located off Independence Ave. SW between the Rayburn House Office Building and HHS. Buy photo here.