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Obama: Jobs plan is insurance against a ‘recession’

/ Source: msnbc.com news services

President Barack Obama said Monday the jobs bill he is sending to Congress is an insurance policy against the economy falling back into recession.

“There are still a lot of folks hurting out there. And my job as president of the United States is not to worry about my job — my task is to worry about their jobs and their economic situation,” he told NBC’s Brian Williams in an exclusive interview that aired Monday.

Obama’s comments came ahead of a press event in the White House Rose Garden during which he said he will send the $447 billion American Jobs Act to Congress and urged lawmakers to quickly pass it. Teachers, police officers, firefighters and others joined the president to call for passage of the bill.

“This is a bill that will put people back to work all across the country,” Obama said. “I am sending this bill to Congress today, and they ought to pass it immediately.”

Obama’s comments came amid more downbeat news about the economy. A widely watched survey of business economists shows many are lowering their growth forecasts, also Monday Bank of America said it will be slashing up to 30,000 jobs over the next few years as part of a $5 billion cost-cutting plan aimed at shrinking the struggling mega-bank's unwieldy size.

Lawmakers will have to carefully examine President Barack Obama's job-creation plan and the final product should include ideas from both parties, House of Representatives Speaker John Boehner, the top Republican in Congress, said Monday.

"It is my hope that we will be able to work together to put in place the best ideas of both parties and help put Americans back to work," Boehner said in a prepared statement.

Lawmakers will have to take a close look at Obama's jobs proposal in light of earlier stimulus efforts, Boehner added. Republicans consider Obama's 2009 plan to be a failure.

The president will also travel across the country to build public support for the package he unveiled last week. He’ll visit the pivotal campaign states of Ohio on Tuesday and North Carolina on Wednesday to ask voters to pressure lawmakers to pass the bill.

The centerpiece of the plan is lower payroll taxes for individuals and businesses. There's also new spending to hire teachers and rebuild schools, among other things.

The Democratic National Committee is launching a television ad campaign to boost support for Obama's new jobs plan. The 30-second ads, which show portions of Obama's speech to Congress last week, will air beginning Monday in politically important states from Nevada to New Hampshire. The ads urge viewers to "Read it. Fight for it. ... Pass the President's Jobs Plan."

Last December, Congress passed a one-year cut in Social Security taxes, reducing the rate for workers from 6.2 percent to 4.2 percent for 2011. Employers still pay the 6.2 percent rate, which is applied to wages up to $106,800.

Obama proposes to extend the tax cut for a year and make it bigger, reducing the Social Security taxes paid by workers to 3.1 percent for 2012. He's also now proposing to extend the payroll tax cut to businesses on the first $5 million of their payroll. About 98 percent of companies have payrolls below the $5 million threshold, according to the White House.

Extending and enlarging the payroll tax cuts costs $240 billion.

Obama urged lawmakers to "pass this jobs plan right away." But he left the responsibility for paying for the $447 billion plan to a special bipartisan House-Senate panel created to reducing deficits by at least $1.2 trillion over the coming decade.

The jobs plan also calls for $130 billion in aid to state and local governments, providing either a welcome infusion of cash for those struggling with budget gaps, government layoffs and crumbling roads or merely a temporary patch for budget holes that are likely to remain long after the federal money runs out.

The perspective of governors and state lawmakers varies but often follows political affiliation, with Democrats generally praising Obama's plan and Republicans remaining skeptical.

"It's a no-brainer: Congress should pass the bill. Now," said California Gov. Jerry Brown, a Democrat, whose state would receive some $13 billion for construction projects and teaching and public safety jobs at a time when it has the nation's second highest unemployment rate.

Many Republican lawmakers and governors are less enthusiastic about accepting the federal money, especially if it locks in costs.

"If we're given the flexibility to spend it as we see fit and not as they see fit, I could see some benefit," particularly for long-delayed infrastructure projects, said Missouri House Budget Committee Chairman Ryan Silvey, a Republican. "I'm not a big fan of using one-time money for ongoing expenses. I think that's what the state should be getting away from, not getting deeper into."

Obama's plan has to clear a politically divided Congress, which could scuttle it entirely or enact bits and pieces of it. As envisioned by Obama, state and local governments would receive $50 billion for transportation projects, $35 billion for school, police and fire department payrolls, $30 billion to modernize public schools and community colleges, and $15 billion to refurbish vacant and foreclosed homes or businesses.

It would mark the second, sizable infusion of federal cash to states in less than three years, coming just as they are burning through the last of the billions of dollars they received under the 2009 stimulus act.

In many cases, states used the original stimulus money to fill in for declining tax revenue and lessen or delay spending cuts for public schools, health care programs and other services. But those budget holes remain in many states as high unemployment persists and government tax revenue remains lackluster.

With another round of money, "the federal government may be able to play a critical role in helping states close their budget gaps," said David Adkins, executive director of the Council of State Governments.

But he said the prospects for receiving the money appear "very, very slim" given the focus on reducing government spending among Republicans in Congress. He said state government leaders are more interested in long-term stable federal funding for transportation projects and education programs.