The Senate is set to take up President Obama's $447 billion jobs bill Tuesday
The largest part of the bill is a $265 billion extension of the payroll tax cut
Republicans oppose the bill's 5.6% surtax on people earning more than $1 million
Shortly after his $447 billion jobs plan stalled Tuesday in the Senate, President Barack Obama vowed to break the broad initiative down into numerous, separate bills – potentially setting up even more showdowns between Democrats and Republicans on how to boost the economy and where to get the money to do so.
Among other things, the package includes an extension and expansion of the current payroll tax cut, an extension of jobless benefits to help the unemployed, new tax credits for businesses that hire the long-term unemployed and additional money to help save and create jobs for teachers and first responders such as firemen.
Republicans are vehemently opposed to a provision recently added by Senate Democrats that would pay for the measure through a 5.6% surtax on annual incomes over $1 million. GOP leaders have accused the president of engaging in so-called “class warfare” for political reasons, and are expected to prevent the bill from reaching the critical 60-vote threshold needed to clear the Senate.
Top Republicans have also said they will prevent a vote from being held on the original version of the measure in the GOP-controlled House of Representatives.
Asked last week if he is laying the groundwork to run against a “do-nothing Congress” – a reprise of President Harry Truman’s 1948 campaign – Obama told reporters: “If Congress does something, then I can’t run against a do-nothing Congress.”
But “if Congress does nothing,” he added, “I think the American people will run them out of town.”
With the economy remaining shaky and unemployment hovering above 9%, the economy is virtually certain to be the dominant issue of next year’s presidential campaign. Obama has touted his new plan in a series of campaign-style speeches across the country over the past couple of weeks.
“Instead of trying to get compromise, (Obama’s) embracing conflict,” House Budget Committee Chairman Paul Ryan, R-Wisconsin, said Sunday on NBC’s “Meet the Press.”
The president is “running around the country campaigning on a bill that he knows won’t pass – he can’t even get it out of the Senate right now – rather than working with us on ideas that we agree on that would actually help create jobs.”
“We want to go with ideas that work,” Ryan declared.
The largest measure in the package is the expanded payroll tax cut, which comes at a projected cost of $265 billion. Employees normally pay 6.2% on their first $106,800 of wages into Social Security, but they are now paying only 4.2%. That break is set to expire at the end of December, and Obama wants to cut the tax in half to 3.1%.
Republicans previously embraced the cut, but have increasingly questioned its economic merit.
A second key measure – estimated to cost roughly $44 billion – is the extension of emergency jobless benefits to help the long-term unemployed. Lawmakers first expanded benefits to cover 99 weeks in 2009, and have since reauthorized the expansion five times.
It is the proposed surtax on people earning over $1 million, however, that has emerged as perhaps the most contentious dividing line between the two parties. The provision was added by key Senate Democrats to make Obama’s bill more acceptable to his own party.
Republicans insist the measure would be devastating to smaller companies.
“Four out of five of these so-called millionaires are small businesses” employing over 300,000 people, Senate Minority Leader Mitch McConnell, R-Kentucky, claimed last week in an interview on Fox Business Network. “Raising taxes in the middle of an economic slowdown is a bad idea.”
McConnell has also blasted the bill as a whole, calling it a rehash of Obama’s 2009 economic stimulus plan. Democrats insist that measure helped prevent a more serious economic meltdown, while top Republicans have characterized it as a failure that did little beyond adding to the federal government’s skyrocketing debt.
“It reminds me of an old country saying at home that there’s no education in the second kick of a mule,” McConnell told Fox. “Our view is we’ve been there, we’ve done that, we know that doesn’t work and we shouldn’t do it again.”
The 2009 measure “was a success in terms of job creation,” House Minority Leader Nancy Pelosi, D-California, insisted later in the week. “It wasn’t fully appreciated, but the fact is that it made a big difference.”
The new proposal “is a much smaller package” but would be “a good start” in terms of job creation, she added.
CNN’s Ted Barrett, Jeanne Sahadi, and Martina Stewart contributed to this report.