Obama Seeks Action on Jobs Bill This Week

Chicago, IL 10/17/2011 (PennyPayDay) – President Barack Obama will urge Congress to get to work this week on passing pieces of his larger, now-defunct jobs bill during a three-day bus tour through North Carolina and Virginia, two southern states that will be critical to his re-election campaign.

The two-state swing, which kicks off Monday in Asheville, N.C., is Obama's latest attempt to combine campaigning for his jobs bill with campaigning for his re-election. While he has pledged to travel the country pitching his plans to get Americans back to work, his stops have focused heavily on political swing states, underscoring the degree to which what happens with the economy is tied to Obama's re-election prospects.

The bus tour comes as the fight over Obama's jobs proposals enters a new phase. The president's efforts to get his entire $447 billion bill passed were blocked by Senate Republicans, leaving Obama and his Democratic allies to push for the proposals contained in the bill to be passed piece by piece.

That means the president's rallying cry this week could go from "Pass this bill" to "Pass these bills."

Presidential spokesman Jay Carney told reporters traveling with Obama that the White House expects the Senate will take action first on a proposal to send aid to states and local governments so that they can hire or prevent layoffs of teachers, police and firefighters. The president has proposed $35 billion for that purpose.

Carney said, though, the decision is up to Senate Majority Leader Harry Reid and that an announcement from Reid was likely soon.

Despite Obama's calls for urgency, it appears the lawmakers may not take up individual components of the president's bill until November, at the earliest. The Senate is set to debate appropriations bills this week, and lawmakers have a scheduled break at the end of the month.

Obama is also touting another elements of his jobs package, $50 billion in new spending on infrastructure.

Obama's stops on the bus trip are designed to highlight those aspects of his plan, including his first stop at the Ashville Regional Airport, where the White House says government funds could be used to renovate a runway and create construction jobs.

The president will also speak at community colleges, high schools and a firehouse as he travels through North Carolina and Virginia this week.

Both states are traditionally Republican leaning, but changing demographics and a boost in voter turnout among young people and African-Americans helped Obama carry them in 2008.

But nearly three years after his historic election, the president's approval ratings in both states are sagging, in line with the national trend.

A Quinnipiac University poll out earlier this month put Obama's approval rating in Virginia at 45 percent, with 52 percent disapproving. The same poll showed 83 percent of Virginians were dissatisfied with the direction of the country. In North Carolina, Obama has a 42 percent approval rating, according to an Elon University poll conducted this month. Most national polls put Obama's approval rating in the mid- to low-40s.

The conservative advocacy group American Crossroads planned to run television ads in both states during Obama's trip, criticizing the president's jobs proposals as a second round of stimulus spending.

The president will be ditching Air Force One for much of his trip this week, traveling instead on a $1.1 million bus purchased by the Secret Service. The impenetrable-looking bus is painted all black, with dark tinted windows and flashing red and blue lights. Obama first used the custom-made bus during a similar road trip in August, when he traveled through Minnesota, Iowa and Illinois.

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Republicans Likely to Kill Obama Jobs Bill

Tomahawk, WI 10/11/2011 (PennyPayDay) – President Barack Obama's jobs bill, facing a critical test in the Senate, appears likely to die at the hands of Republicans opposed to stimulus spending and a tax surcharge on millionaires.

Obama has been waging a campaign-style effort seeking to rally public support behind the $447 billion measure, which will be the subject of a Senate vote Tuesday. The plan combines payroll tax cuts for workers and businesses with $175 billion in spending on roads, school repairs and other infrastructure, as well as unemployment assistance and help to local governments to avoid layoffs of teachers, firefighters and police officers.

The key elements of the jobs package reprise parts of Obama's $800 billion-plus 2009 stimulus measure and a Social Security payroll tax cut enacted last year. Unlike the controversial deficit-financed stimulus bill, the jobs measure would be paid for by a 5.6 percent surcharge on income exceeding $1 million that raises more than $450 billion over a decade.

In making the case for the bill, the White House cites economists like Mark Zandi of Moody's Analytics, who predicts that the measure would add 2 percentage points of growth to the economy, add 1.9 million payroll jobs, and reduce unemployment by a percentage point. But Republicans point to optimistic predictions about the 2009 measure that didn't come to pass; unemployment hovers just above 9 percent nationwide.

Republicans say the 2009 stimulus measure was an expensive failure and that the current plan is just like it.

The president has been struggling in opinion polls and his crusade for the measure has always been a long shot given that Republicans control the House and can filibuster at will in the Senate. Obama has nonetheless pressed for the bitterly divided Congress to pass the measure in its entirety rather than seek compromise with his GOP rivals.

"This is not the time for the usual games or political gridlock in Washington," Obama said in his weekend radio and Internet address. "Any senator out there who's thinking about voting against this jobs bill needs to explain why they would oppose something that we know would improve our economic situation."

While Republicans backed the payroll tax cut last year and support elements like continued tax breaks for investments in business equipment, they're adamantly opposed to further spending and say the tax surcharge would strike at small businesses, which, in total, employ more than 300,000 people.

"It's not a jobs bill. In our view, it's another stimulus bill," Senate Minority Leader Mitch McConnell, R-Ky., told Fox News last week. "I don't think it'll pass and I don't think it should." House GOP leaders say they won't bring the measure to the floor.

Democratic unanimity is not assured. Moderates like Sens. Ben Nelson, D-Neb., and Joe Manchin, D-W.Va. -- both are up for re-election next year in states where Obama figures to lose -- may abandon the party, even as oil-state Democrats have been assuaged by a decision to get rid of an Obama proposal to have oil companies give up tax breaks.

Top Democratic vote counter Sen. Dick Durbin of Illinois said in an interview Monday on the Chicago television station WTTW that the party could lose up to four Democrats on the vote. That would leave the measure short of a simple majority, much less the 60 votes needed to cut off a GOP filibuster on a motion to simply begin debate on the measure. If Democrats fail as expected -- they control 53 votes in the 100-member Senate -- it'll start up a fresh wave of partisan finger-pointing.

Both the House and Senate are then expected to turn this week to approving U.S. trade agreements with Colombia, Panama and South Korea, one of the few areas of agreement between Republicans and the administration on boosting the economy.

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Obama Jobs Plan Arguments

Tomahawk, WI 9/28/2011 (PennyPayDay) – President Barack Obama’s $447 billion jobs plan would help avoid a return to recession by maintaining growth and pushing down the unemployment rate next year, according to economists surveyed by Bloomberg News.

The legislation, submitted to Congress this month, would increase gross domestic product by 0.6 percent next year and add or keep 275,000 workers on payrolls, the median estimates in the survey of 34 economists showed. The program would also lower the jobless rate by 0.2 percentage point in 2012, economists said.

Economists in the survey are less optimistic than Treasury Secretary Timothy F. Geithner, who has cited estimates for a 1.5 percent boost to gross domestic product. Even so, the program may bolster Obama’s re-election prospects by lowering a jobless rate that has stayed near 9 percent or more since April 2009.

The plan “prevents a contraction of the economy in the first quarter” of next year, said John Herrmann, a senior fixed-income strategist at State Street Global Markets LLC in Boston, who participated in the survey. “It leads to more retention of workers than net new hires.”

Some 13,000 jobs would be created in 2013, bringing the total to 288,000 over two years, according to the survey. Employers in the U.S. added 1.26 million workers in the past 12 months, Labor Department data show.

Obama’s plan, announced on Sept. 8, calls for cutting the payroll taxes paid by workers and small businesses while extending unemployment insurance. It also includes an increase in infrastructure spending and more aid for cash-strapped state governments.

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Why the Obama Jobs Plan is a Loser

Tomahawk, WI 9/9/2011 (PennyPayDay) – The President's long-awaited address to Congress and the voting public wasn't a matter of a "style over substance." Obama delivered on the former, but there was little, if any, substance to chew on.

The headlines were "$450 billion" and the phrase "pass this bill." The dollar figure was largely meaningless and as Matt Nesto noted, the President's call to pass the bill sounded more like the request of a salesman, not the mandate of a strong President.

Every aspect of the vague program was short-term in nature. The much reviled Wall Street is constantly criticized for focusing on the short-term, yet the same President, placing himself on the frontline of class warfare, offered tax cuts running only through 2013.

If you're currently planning or expanding a business you most likely are doing so with more than the next 5 quarters in mind. A major plant started today would be completed roughly at the same time as the proposed tax cuts expire. These tax breaks will do nothing to create jobs today.

The bill is "$450 billion on the ask" as Nesto put it. For those unfamiliar with trading parlance, the ask is what the seller wants, the bid is what the buyers offer. In this case the would-be buyers are ultimately the voters. It seems unlikely Americans are going to surrender the nearly half a trillion without some evidence that the money will be better spent than what was dumped into stimulus efforts undertaken in 2009.

Estimates on what the "American Jobs Act" would do for the economy range from our rather conservative figure of "nothing" to Mark Zandi's view that passage of the still-nonexistent bill would add 2 points to GDP and hack 1% off the 9.1% unemployment rate.

Mr. Zandi is employed by Moody's, a ratings agency. It's worth noting that it's in Moody's best interest to curry favor with the White House in light of the abuse being heaped upon fellow ratings agency Standard & Poors for having the audacity to express a negative view of the government. Not to suggest that Mr. Zandi is in any way conflicted in his opinion; it's simply something to consider as the Administration rapturously embraces Moody's view.

Nesto pointed out the importance of Fed Head Bernanke's Thursday afternoon speech, despite his efforts to keep focus on politicians. The "money line" from Bernanke's speech was assurance that the Fed will do "all it can" to foster jobs growth, provided inflation remains low. In other words, the Fed will continue to do what it's been doing for 3 years.

The President avoided mention of the Federal Reserve but he did cite both Warren Buffett and Abraham Lincoln in his plea for more stimulus now to be paid for later. Lamentably, Lincoln has been dead for 146 years and Warren Buffett's lifetime contribution to the Treasury and the political process has thus far been limited to dodging the estate tax and writing op-eds.

Ultimately the speech amounted to a decent pre-game show for the Packers and Saints. Beyond that the American Jobs Act won't be worth much discussion until we see the details the President promised for next week.

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Obama Still Saying No Recession to Worry About

Shawshank, VA 8/3/2011 (PennyPayDay) -- President Barack Obama's spokesman is discounting talk that the economy may be headed back into recession, despite recent concerns of economists.

Spokesman Jay Carney says there is no question that economic growth and job creation have slowed over the past half year.

But, Carney told a White House briefing, "We do not believe that there is a threat of a double-dip recession."

The recession that began in December 2007 officially ended in summer 2009 and the economy has seen growth since then. However, that growth has slowed to a trickle in recent months.

He blamed the earthquake and tsunami in Japan, higher energy prices, default worries in Europe and recently resolved uncertainty over raising America's borrowing limit. Carney said, "We believe the economy will continue to grow."

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Obama Talks New Housing Help

Tomahawk, WI 5/12/2011 (PennyPayDay) -- President Obama said that struggling homeowners need even more help from the banks, in a CBS town hall that aired Thursday.

Calling housing "the biggest headwind on the economy right now," Obama broached two relatively new ideas for the White House: Longer-term mortgage modifications and principal reductions "in some cases."

Both ideas would require Congress to pass laws to force the banks to cooperate.

"If we were there for you [banks] when you got into trouble, then you've got to be there for the American people when they're having a tough time," Obama said during the CBS program which was taped on Wednesday.

In response to a question posed by Nancy Logan of Virginia, an underwater homeowner whose three-year mortgage modification will expire in January 2012, Obama said that reducing some mortgage principals would benefit the banks as well as homeowners.

"In addition to these short-term loan modifications, we want to see if we can get longer-term loan modifications. And in some cases, principal reduction, which will be good for the ... person who owns the home, but it'll also be good for the banks over the long term," Obama said.

Obama's mention of principal reduction, in particular, is sure to stir Wall Street banks. When Obama campaigned, he had talked about pushing for policy to give bankruptcy judges the ability to write down principal owed on homes whose owners are bankrupt.

But when he took office, the president stood on the sidelines of legislation that would have allowed principal reductions, and his administration said that current housing policy was good enough.

Since then, the president rarely, if ever, publicly discussed principal reductions.

Big banking groups have traditionally lobbied hard against any new policy that would open the door for more principal write downs.

At least one banking group said they weren't opposed to a policy that would open the door for mortgage modifications that spanned longer periods, but they can't support legislation that invites more principal write downs.

"Banks are committed to helping Americans struggling with their mortgage," said Scott Talbott, senior lobbyist with the Financial Services Roundtable, a bank lobbying group. "Banks have already worked directly with over 4 million Americans to make long-term mortgage modifications."

During the town hall, Obama also defended his administration's housing programs, which one independent inspector general had criticized as a failure. House Republicans passed a bill to kill the administration programs that give banks incentives to modify mortgages.

"The problem is .. that the need is so great. So it's like you have a huge pothole, and you only have so much gravel," Obama said. "If you're talking about $5 trillion worth of home value, and a program that only has a few billion dollars, then there are a lot of people who are not going to be helped."

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