By John W. Schoen Senior producer
updated 9/12/2011 2:58:56 PM ET 2011-09-12T18:58:56

In making his pitch for a comprehensive jobs package Monday, President Barack Obama has been assuring lawmakers and voters that the plan “won’t add a dime to the deficit.”

At best, it’s a promise he can’t make. At worst, the numbers just don’t add up.

In a White House Rose Garden speech Monday, Obama renewed his pledge to unveil details next week of how he would pay for the plan.

  1. More must-read stories
    1. The Hartford Courant, Political
      Wild Wall St.

      Has the market volatility got you nervous? These cartoons may give you a little comic relief.

    2. Cyber-thieves create fake Kelley Blue Book site
    3. US says Reebok toning shoes don't really
    4. Can you live on $9 an hour? Play the game

“It’s a plan that lives by the same rules that families do: We’ve got to cut out things that we can’t afford to do in order to afford the things that we really need,” Obama told reporters.

Story: Obama: Jobs plan is insurance against a ‘recession’

It’s fairly clear what the plan would cost. Though the price tag has not yet been officially tabulated by the Congressional Budget Office, private economists have come up with back-of-the-envelope estimates of about $450 billion.

The biggest single piece of the plan would extend an existing payroll tax cut and expand it to give a "typical working family" another $1,500 in spending money. The fatter paychecks would boost demand for everything from new cars to restaurant dinners, generating added consumer spending that could help create the equivalent of as many as 750,000 new jobs, according to Moody’s Analytics chief economist Mark Zandi. In some cases, the proposals would add extra hours to existing jobs, but the impact on the economy would be the same, he said.

“The plan would go a long way toward stabilizing confidence, forestalling another recession, and jump-starting a self-sustaining economic expansion,” Zandi wrote in a detailed analysis of the president's plan.

Obama is also proposing a $65 billion payroll tax break for employers who hire new workers, which Zandi figures would add at least 300,000 jobs. Another $105 billion in proposed spending on new infrastructure, from roads and bridges to schools, would create an estimated 400,000 jobs.

Spending roughly $50 billion to renewing the federal government’s extended unemployment insurance, which is set to expire at the end of the year, would add another 275,000 jobs. Zandi figures another 135,000 jobs would be saved or created by spending $35 billion on federal aid to cash-strapped states. Many states are laying off tens of thousands of teachers, police offers and firefighters to try to close their own budget gaps.

But while the cost of the proposal is not in dispute, it’s hard to assess the eventual impact on the federal budget deficit.

Obama hinted Monday that at least part of the cost would be offset by increasing taxes and closing loopholes for corporations and upper income households.

Major Market Indices

“It’s a plan that says everybody — including the wealthiest Americans and biggest corporations — have to pay their fair share,” Obama said.

White House budget chief Jack Lew said the plan would raise $400 billion over 10 years by limiting deductions for individuals making more than $200,000 a year and families earning more than $250,000. The rest of the cost would be paid for by raising a number of other taxes, including those on corporate jet owners, and cutting subsidies for the oil and gas industry.

Those proposals aren’t new. After failing to win support for increased taxes in this summer's bruising standoff over raising the debt ceiling, the odds that Congress would now reverse course on the issue appear to be slim to none.

Republicans already have attacked Obama's proposals as another effort to stimulate the economy with increased federal spending. Opponents of the idea argue that government is not very efficient at creating jobs.

If Zandi’s estimates are correct, for example, the program would cost roughly $235,000 per worker to create jobs that would likely pay a quarter of that or less annually.

In any case, any proposal to raise taxes or cut spending would have to go to the bipartisan “supercommittee” of 12 members of Congress as part of last month’s agreement to raise the debt ceiling.

Under terms of the Budget Control Act of 2011, the panel has until late November to come up with a plan to cut $1.5 trillion from the federal deficit over the next 10 years. Congress then has until Dec. 23, 2011 to approve the plan. If it fails to do so, some $1.2 trillion in “automatic” cuts would take effect in 2013.

In his speech to Congress last week laying out his plan, Obama called on the committee to raise its deficit-cutting target to $1.9 trillion to cover the cost of his jobs package. But the committee is under no legal obligation to do so.

© 2013 Reprints

Video: Obama: ‘We can’t sit back and squabble’

  1. Closed captioning of: Obama: ‘We can’t sit back and squabble’

    >>> good evening. this is not what you want when you're trying to launch a recovery. today, the bank of america announced a plan to slash 30,000 american jobs and reportedly close a lot of branches in cities and across the countryside all over this country. the plan is designed to make sure bank of america survives and stays healthy, but it's the largest single u.s. lay-off of the year. at the same time, the president was out there again today selling his new jobs plan. he's fighting his own downward numbers and questions about becoming a one-term president. it's what we talked about in our exclusive conversation with the president at the white house at a critical time for him and this country.

    >> occurs to me we are sitting 30 feet from harry truman 's official white house portrait. members of your base are asking when are you going to get your harry truman on?

    >> well, look, harry truman ran against a do-nothing congress. this congress hasn't done much so far, but it still has an opportunity over the next several months to do something that helps the american people . and i want to give them a chance. i'm pleased to see that so far speaker boehner and some of the other republican leadership have said that some of the proposals i put forward deserve serious consideration. and i'm going to be open to any ideas they have in addition to how we are going to grow this economy, but what is not an option is doing nothing.

    >> did you come to a decision that what the country needs is in large part a good old public works bill?

    >> what i came to the conclusion is that given all the headwinds we have been seeing this year -- high gas prices as a result of the arab spring, the tsunami in japan which disrupted supply lines but probably most significantly what's been happening in europe and the turmoil that's taken place there, financial markets that are affecting what businesses are making decisions about here in the united states , that we need a boost. the plan that i put forward -- the american jobs act -- puts construction workers back to work, puts teachers back to work, puts our veterans who are coming home looking for a job back to work, the long-term unemployed back to work. it provides tax breaks for small businesses when they hire new employees. so this package, it's estimated, would help the economy grow by as much as an additional 2%. that could mean an additional 2 million jobs.

    >> all of this, of course, is if you get what you want in a highly toxic atmosphere and it sure looked to me from the outside like you went into the debt ceiling fight thinking, surely they will do the statesman-like thing, surely they won't go there. and it seemed to me as if speaker boehner was coming to you saying, look, if it were up to me, we would do this, but i've got this membership problem.

    >> right.

    >> and they went there. now that marks our politics.

    >> well, there is no doubt that we went to the brink in a way that was unacceptable. we are in an economic crisis and the fact that we made it worse here in washington is inexcusable. we can't sit back and squabble while the country is suffering.

    >> your approval, 44%. on your handling of the economy, 37%. voters now prefer a generic, as-yet-unnamed republican. and most americans now say that you are in something that you can't likely recover from. do you accept those numbers? do you have to wear those?

    >> well, look, you know, one of the things that i learned very early on is not to worry about polls. if i was worrying about polls i wouldn't be sitting here interviewing with you. as i recall when i was running for president, i was down about 30 points around this time in my first run for presidency. you know, the truth of the matter is the american people have gone through the worst economic crisis since the great depression. and they are understandably impatient and i can say to them, look, all the actions we have taken have been the right actions. if we hadn't taken those actions, things would be much worse, but the bottom line is unemployment is still at 9%. and there are still a lot of folks hurting out there. my job as president of the united states is not to worry about my job. my task is to worry about their job and their economic situation.

    >> you see what's out there. you see what's being said about you. what do you say to those americans who voted for that man on the poster that said "hope"?

    >> well, what i would say is that for the last two and a half to three years, we have been working tirelessly and nonstop to deal with the worst economic crisis of our lifetimes. ultimately, i'm going to be judged by, you know, whether we have stayed focused on making sure that this economy is moving in the right direction. and like the captain of a ship in a storm, you know, when the ship is rocking and people are getting hurt, they're not going to be happy, no matter how good the captain's doing. now, my hope is that when we are on the other side of it, folks will look back and say, you know, he wasn't a bad captain of the ship. what i tell everybody i meet whether they voted for me or they didn't is this country always gets through these storms. we always right the ship. and we will this time as well.

    >> part of our conversation with the president at the white house . there is more on our website. today, by the way, the administration announced how they plan to pay for his new jobs plan through a series of previously proposed tax hikes that have all been raised by the white house in the past and rejected by republicans.


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%