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Kerry unveils jobs plan

Democrat focuses on movement of jobs overseas

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Stay will CNN-USA for updates and analysis from the campaign trail as both President Bush and the presumptive Democratic nominee, Sen. John Kerry, press their economic viewpoints.
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DETROIT, Michigan (CNN) -- Sen. John Kerry announced Friday that if elected president he will reverse the nation's job losses and create 10 million new jobs in the next four years.

"America cannot afford four more years of a president who is the first president to lose jobs since Herbert Hoover and the Great Depression," Kerry, the presumed Democratic presidential nominee, said in Michigan, a key battleground state in the race for the White House.

The speech at Wayne State University was the first of several in which the four-term senator from Massachusetts plans to roll out his economic plans.

Friday, Kerry proposed targeting the outsourcing of jobs overseas with "the most sweeping international" tax reform law in 40 years.

Kerry said he would fight to change the tax code, which currently "rewards companies more for moving overseas than it does to reward them for creating jobs in America."

But some economists questioned whether Kerry's "Jobs First" plan would do anything to stem the flow of some jobs overseas.(Full story)

And the Bush-Cheney campaign immediately dismissed the Kerry proposal as a "political tax shell game."

Steve Schmidt, a Bush-Cheney spokesman, said Kerry's proposal wouldn't stop the outsourcing of jobs. "The other parts of Kerry's proposal mean tax hikes for middle income families and small businesses," Schmidt said in a written statement.

Kerry, however, insisted it would make a difference.

Under a "deferral" feature in U.S. tax law, companies can get away with paying no taxes on money earned "as long as they keep the money overseas," Kerry said. Kerry wants to tax that money "at the same rate as money made by businesses here at home."

The plan would not affect companies that locate in a foreign country to sell to consumers in that country, but would affect those who use foreign locations to export back to the United States or other nations, he said.

Those that take advantage of the current system "don't pay a dollar in taxes," he said. "We end up paying them $8 billion a year."

Kerry said he would offer a "reasonable transition period" for businesses to adapt to the change.

Money saved from "ending this giveaway" would be used "to finance smart tax cuts that would create jobs here in America," he said.

The savings could finance a 25 percent payroll tax credit to small businesses when they provide health care for their workers, Kerry said. "If they create jobs they will pay lower taxes in a Kerry administration than they do under President Bush today."

The savings would also be used to reduce corporate tax rates by 5 percent to improve competitiveness and narrow the differences between tax rates inside the United States and overseas, he said.

"This is a realistic plan," he said. America can't bring back every lost job, but the plan would "enable our economy to create jobs and to keep more good jobs here in America," he said. "It offers a long-term strategy to win our economic future."

Kerry also vowed to enforce provisions in trade agreements that "the Bush administration has refused to enforce."

"As president I will hold countries like China accountable when they manipulate currency to inflate exports and depress ours," he said.

Kerry repeatedly slammed Bush.

The president's economic plans have clearly failed, he said, "but he stubbornly refuses to admit and his only answer to failure is the same tax giveaways."

Complaining about the Bush campaign's "distorted attacks" against him, Kerry said, "The truth is this president doesn't have a record to run on but a record to run from and that's what he's doing."

Bush and other Republican leaders have repeatedly said Kerry would raise taxes on the middle class -- an allegation he rejected.

"Everything the Bush campaign is trying to do is designed to distort one clear fact: my plan doesn't raise taxes on the middle class. My plan cuts taxes for the 98 percent of Americans who make under $200,000 a year."

Kerry also predicted that lobbyists for some major businesses will fight to "fiercely defend the status quo."

But, he said, "I don't believe they want to ask the American taxpayer to subsidize the loss of their own jobs.

"I have fought for my country for 35 years," the decorated Vietnam veteran said. "And I am ready for this fight."

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