WASHINGTON — President Obama, facing a stubbornly high unemployment rate, plummeting consumer confidence, volatile financial markets and an economy teetering on the brink of recession, outlined a $447 billion jobs plan Thursday night that contained many provisions championed by retailers and apparel brands.
Dubbed the American Jobs Act, Obama’s comprehensive plan includes a mix of tax cuts for businesses and individuals, and investment in infrastructure and schools.
“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,” Obama said in his speech to a joint session of Congress. “It will create more jobs for construction workers, more jobs for teachers, more jobs for veterans and more jobs for the long-term unemployed. It will provide a tax break for companies who hire new workers, and it will cut payroll taxes in half for every working American and every small business. It will provide a jolt to an economy that has stalled, and give companies confidence that if they invest and hire, there will be customers for their products and services.”
At the heart of the president’s jobs plan are business and individual tax cuts. It would provide a one-year extension of payroll tax cuts for workers that took effect this year, giving a family earning $50,000 a year a tax cut of $1,500.
On the business front, Obama proposed several tax cuts, including a tax break of up to $4,000 for employers who hire workers unemployed for over six months, a payroll tax cut for employers on the first $5 million in wages, a temporary elimination of the 6.2 percent tax that firms pay for any growth in payroll up to $50 million above the prior year, and a tax break that will allow companies to immediately deduct the full value of new equipment and plants into 2012.
Obama’s plan also calls for a one-year extension of expiring unemployment insurance.
Retailers and apparel brands looking for a nod from Obama on business tax cuts, as well as support for three pending trade agreements, were rewarded.
Several industry chief executive officers, including Mike Duke, president and ceo of Wal-Mart Stores Inc., and Robert A. McDonald, chairman, president and ceo of Procter & Gamble Co., sent a letter to Congressional leaders Wednesday urging Congress to act on three trade deals with Panama, South Korea and Colombia that have been caught in political limbo for four years.
The heads of the American Apparel & Footwear Association and National Retail Federation also urged Congress and the Obama administration Thursday to pass and enact the three trade deals as an engine for job creation.
Lawmakers cannot act on the trade deals until the White House formally submits them to Congress. Obama signaled his support for the trade deals in his speech.
“Now it’s time to clear the way for a series of trade agreements that would make it easier for American companies to sell their products in Panama, Colombia and South Korea, while also helping the workers whose jobs have been affected by global competition,” Obama said. “If Americans can buy Kias and Hyundais, I want to see folks in South Korea driving Fords and Chevys and Chryslers. I want to see more products sold around the world stamped with three proud words: “Made in America.”