US & Canada

US jobs plan: Barack Obama unveils $450bn package

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Media captionMr Obama said an "American Jobs Act" would create new jobs for construction workers, teachers and the long-term unemployed

US President Barack Obama has unveiled a $450bn (£282bn) package of tax cuts and spending plans aimed at creating jobs and bolstering the economy.

He wants to fund huge construction projects, schools and services, while giving tax cuts to workers and small businesses to boost recruitment.

Mr Obama told a joint session of Congress that politicians needed to act quickly to pass the package.

Republican congressman John Boehner said the plans "merit consideration".

"We hope he gives serious consideration to our ideas as well," said Mr Boehner, the speaker of the House of Representatives.

The Republicans control the House, and have derailed many of Mr Obama's legislative proposals. Mr Boehner's support is likely to be crucial if the measures are to be approved.

Some of Mr Obama's opponents have already dismissed the jobs plan as a crude attempt to boost his flagging popularity in the run-up to next year's presidential election.

Some 9.1% of Americans are currently out of work, and the issue is expected to dominate the election campaign.

The BBC's North America editor Mark Mardell says the president has set a trap for the Republicans - either they back his proposals, or he will campaign against what he will portray as a Washington elite happy to cut taxes for their rich friends but not for ordinary people.

'Political grandstanding'

In his speech, Mr Obama urged Congress to "stop the political circus" and said everything in the jobs plan was based on principles already supported by Republicans and Democrats.

"The purpose of the American Jobs Act is simple: to put more people back to work and more money in the pockets of those who are working," he said.

"It will create more jobs for construction workers, more jobs for teachers, more jobs for veterans, and more jobs for the long-term unemployed."

The president has yet to give details on how the plans would be funded, but he hinted that the money could be found in spending cuts and promised to release more details on 19 September.

The centrepiece of the jobs plan is to expand a cut in the Federal Insurance Contributions tax, a levy paid by employers and workers to fund social security and healthcare for retirees.

Congress approved a cut in the tax for workers last year, from 6.2% to 4.2%. But that measure was due to expire in December.

Mr Obama wants to continue that cut next year, lower the tax even further to 3.1% for workers, and extend a similar cut to companies, at a cost of $240bn.

Another core proposal is to provide $85bn aid to local and state governments.

The money would be spent on helping to keep teachers and emergency services workers in jobs, modernising schools, refurbishing vacant homes and helping young people into work.

Other proposals include:

  • $50bn for infrastructure projects, including a plan to upgrade the country's airports
  • $49bn for a one-year extension of benefits for the long-term unemployed, and $8bn in tax relief
  • tax breaks for firms taking on new employees
  • measures to broaden home ownership by making low-interest mortgages more widely available

The president wants to submit the bill to Congress next week.

Some Republicans have suggested they would be willing to support at least part of the plan, but others have already indicated their opposition.

Representative Paul Broun of Georgia, one of the Republicans who chose not to attend the speech, tweeted: "This is obviously political grandstanding and class warfare."

The two parties clashed all summer over plans to sort out the country's debt levels, which prompted a historic US government credit downgrade.

The political battles on Capitol Hill have seen the president's approval slump, but ratings for Congress have been even lower.

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