Daytime Station Support Program
Membership Campaign Program
Summer of Service Program
In the past, President Obama has preferred to send broad outlines for legislation up to Capitol Hill, leaving the details to lawmakers. But not anymore.
On Monday, surrounded by teachers, construction workers and police officers, Obama presented a bill to Congress that he says will boost the economy and create jobs. And he says the package of tax cuts and infrastructure spending will be paid for.
Obama is challenging Congress to pass his bill — or else be blamed for continued unemployment and a tax hike, since the payroll tax cut he wants to extend and expand expires at the end of the year.
"If Congress does not act, just about every family in America will pay more taxes next year. And that would be a self-inflicted wound that our economy just can't afford right now," he said at the Rose Garden event. "So let's pass this bill and give the typical working family a $1,500 tax cut instead."
The White House says the lion's share of the $450 billion jobs bill can be offset by limiting itemized deductions for the rich, even though that idea has been rejected in the past by Democrats and Republicans in Congress.
In addition to this short-term stimulus, the president also hopes to add sweeping deficit reduction to the fall agenda.
Next week, the president will lay out specific recommendations for long-term deficit reduction. He will tell the new deficit-cutting supercommittee that everybody — including the wealthiest Americans and biggest corporations — should pay their fair share.
"Do we keep tax loopholes for oil companies — or do we put teachers back to work?" Obama said. "Should we keep tax breaks for millionaires and billionaires — or should we invest in education and technology and infrastructure, all the things that are going to help us out-innovate and out-educate and out-build other countries in the future?"
The supercommittee is supposed to find a minimum of $1.2 trillion in savings, but there are calls for the committee to go further. The chairmen of the president's fiscal commission released a letter Monday, urging the committee to "go big."
Co-chairman Erskine Bowles said $1.2 trillion in deficit reduction is not enough.
"We need to act and we need to act now," he said. "We need to do this to reassure the markets. We also need to do it to restore public trust ... the trust that was lost during the whole debt default debacle."
"Going big" means total deficit reduction of about $4 trillion over 10 years. And that would mean taking yet another stab at a grand bargain — raising some tax revenue while making changes in Medicare and Social Security.
Chances For A Deal
But since taxes and entitlements are so politically polarizing, budget expert Stan Collender says this latest try at a grand bargain will face the same challenges as all the previous attempts.
"First of all, we have to stop thinking of the supercommittee as a superhero. It doesn't have unbelievable powers to jump over politics," he says. "The supercommittee is going to have enough trouble just doing the basic job of trying to come up with $1.2 trillion in deficit reductions, and the idea that we're going to suddenly ask it to do more, maybe a lot more, is a little ludicrous."
But Collender says sooner or later the deficit will have to be brought down, and the solution will be some mix of spending cuts, tax reform and entitlement reform — because that's where every group that's tried has ended up, whether it's the Gang of Six, the speaker and the president, or umpteen deficit commissions.
"It doesn't make any difference whether it's a bipartisan group or a largely Republican or largely Democratic group or ... something inside or outside of government," he says. "Essentially, you're going to ... come to the same conclusions — if the goal is actually to reduce the deficit."
Obama says he wants the special committee to go beyond the minimum $1.2 trillion in savings. But by how much?
For now, the White House will only say the president will put forward his plans next week for the tax code and entitlements — the two big reforms that put the "grand" in any grand bargain.