WASHINGTON | Fri Sep 9, 2011 5:19am EDT
(Reuters) – President Barack Obama, seeking to rescue the troubled U.S. economy and his own prospects for re-election, embarks on an uphill battle on Friday to win Republican support for a make-or-break $447 billion jobs plan.
The proposals, heavily weighted toward tax cuts for workers and businesses, were carefully crafted to appeal to middle-class voters who gravitate toward the political center.
A day after unveiling his ideas on Capitol Hill, Obama will pitch them directly to Americans on Friday as he visits Virginia in the kick-off to a months-long campaign to promote the package.
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 percent unemployment rate that threatens Obama’s presidency and addressing what Obama called a “national crisis.”
Obama hopes he can rally enough popular support to pressure Republicans to get behind his plan, despite their vehement opposition to most of his agenda.
“The next election is fourteen months away,” Obama told a rare joint session of Congress. “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.”
TAX CUTS YES, INFRASTRUCTURE NO
But analysts were cautious, despite some initial signals Thursday night from Republican congressional leaders of a willingness to find common ground on the plan.
“A deal with some tax cuts is doable,” said Greg Valliere, an analyst at the Potomac Research Group, which advises investors on politics. But he sees little prospect of Republicans backing significant spending on infrastructure that is part of Obama’s plan.
With debt and deficit reduction as their top issue, Republicans have derided Obama’s 2009 stimulus package as wasteful and reject “Keynesian” short-term fiscal measures to boost the economy.
Financial markets reacted coolly to the speech. In Asia, the dollar eased against a basket of currencies and U.S. Treasuries slipped.
At the heart of the plan is a proposal to extend and deepen a payroll tax cut for workers that passed last December. Obama would also cut payroll taxes for businesses, offering the most generous breaks to small firms and those hiring new workers.
Obama also said his administration was working to try to throw a lifeline to the ailing housing market by broadening access to refinancing for U.S. homeowners.
Obama’s aides could take some encouragement from statements issued by House of Representatives Speaker John Boehner and Speaker Eric Cantor, who spent much of the last year locked in bitter combat with the White House.
FEARS OF RECESSION
Boehner said Obama’s ideas “merit consideration.” Cantor, whose state Obama will visit on Friday, said the payroll tax cuts were “something that will be a part of the discussions.”
While not an endorsement, the statements were also a far cry from a declaration of “dead on arrival” that many expected would greet Obama’s plan.
Bleak unemployment figures and other recent data have raised fears the economy could slide into another recession. While the economy’s woes have sent 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.
Christopher Arterton, a political science professor at George Washington University, said Obama succeeded in putting himself “back at the center of the debate on the future of the country” — one of his more immediate challenges.
Republicans have hammered 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 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 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.
Trumka said afterward that the president had made clear he was “willing to go to the mat to create new jobs on a substantial scale.”