Obama’s Jobs Plan Offers Tax Breaks, Incentives

Tax breaks, construction jobs, and continued assistance for the unemployed formed the basis of President Barack Obama’s jobs plan in his speech Thursday evening.

Orated to a joint session of Congress—and squeezed in before the start of an NFL football game—the president promised his new American Jobs Act (AJA) would be “a jolt to an economy that has stalled.”

There were no surprises in the AJA and Obama focused on the fact that both Republicans and Democrats have supported the proposals at some stage. “There should be nothing controversial about it,” he said, beseeching politicians to “stop the political circus and actually do something to help the economy.”

The bill, which will be taken to Congress next week, gives a $4,000 tax break to businesses that hire anyone who has spent more than six months out of work.

It also promises jobs to thousands of teachers, gives companies extra tax credits if they hire veterans, and extends unemployment insurance for another year.

The AJA will not add to the deficit, he said. The plan would be paid for by increasing the additional $1.5 trillion in cuts that he has asked the Debt Committee to come up with by Christmas.

The president plans to outline a more comprehensive deficit plan on Sept. 19.

Cuts to Medicare and Medicaid are still on the table. “We are spending too fast to sustain the program. We have to reform Medicare to strengthen it,” Obama said.

He said wealthy Americans and corporations should “pay their fair share,” adding, “This isn’t class warfare. This is simple math.”

Obama referred to a recent opinion piece in the New York Times by Warren Buffet. In it, Buffet said, "While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks."

Buffett urged an increase in income taxes for those earning more than $1 million in 2009.

A dismal jobs report in August showed a stagnant month, adding to woes that have seen the unemployment rate hike to 9.1 percent—up from 7.8 percent when Obama took office in 2008.

House Speaker John Boehner (R-Ohio) replied to Obama’s speech with a statement calling for the White House and Congress to seek common ground. The focus for Republicans is on removing government barriers to private-sector job growth.

“The proposals the president outlined tonight merit consideration,” Boehner said. “It’s my hope that we can work together to end the uncertainty facing families and small businesses, and create a better environment for long-term economic growth and private-sector job creation.”

Obama’s plan outlined the need to work with businesses; to see more export products stamped with “Made in America,” and to pay small businesses that have contracts with the federal government, faster.

“We have to be able to out-build and out-innovate every other country on earth,” he said.