Jobs plan would help modernize schools

The boldest element of Obama’s plan would slash the Social Security payroll tax for tens of millions of workers and for employers, too. For individuals, that tax has been shaved from 6.2 percent to 4.2 percent for this year, but it will go back up again without action by Congress. Obama wants to deepen the cut to 3.1 percent for workers.

The president also would apply the Social Security payroll tax cut to employers, halving their taxes to 3.1 percent on their first $5 million in payroll. Businesses that hire new workers or give raises to those they already employ would get an even bigger benefit: On payroll increases up to $50 million, they would pay no Social Security tax.

Obama also proposed a $4,000 tax credit for businesses that hire people who’ve been out of work for six months or longer, as well as extra tax credits to companies that hire veterans. And he repeated his calls for a one-year extension of unemployment insurance to prevent up to 6 million people from losing their benefits.

The president hopes to spur hiring in a nation where 14 million people remain out of work and the jobless rate is stuck at 9.1 percent.

Under soaring expectations for results, Obama sought to put himself on the side of voters who he said could not care less about the political consequences of his speech.

“The question is whether, in the face of an ongoing national crisis, we can stop the political circus and actually do something to help the economy,” Obama said.

His aim was to put pressure on Congress to act—and to share the responsibility for fixing the economic mess that is sure to figure in next year’s elections. For every time he told lawmakers to “pass this bill,” which he said repeatedly, Democrats cheered while Republicans sat in silence.

Tax cuts amounted to the broadest part of Obama’s proposal—in essence, a challenge by the Democratic president to congressional Republicans to get behind him on one of their own cherished economic principles or risk the wrath of voters for inaction. The tax cuts alone would amount to roughly $250 billion.

The president said deepening the payroll tax cut would save an average family making $50,000 a year about $1,500, compared to what they would get if Congress did not extend the current tax cut.

“I know some of you have sworn oaths to never raise any taxes on anyone for as long as you live,” Obama said, a reference to the conservative tea party influence on many House Republicans. “Now is not the time to carve out an exception and raise-middle class taxes, which is why you should pass this bill right away.”

Obama did not venture an estimate as to how many jobs his plan would create. He promised repeatedly that his plan would be paid for, through additional cuts to the federal budget, adjustments to health care programs like Medicare and Medicaid, and changes to the U.S. tax code. He said more details would follow soon.

But short-term job creation wasn’t the only focus of his speech. He repeated a theme he has said many times before—that education is a key to long-term economic prosperity.

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