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U.S. President Barack Obama's jobs speech Thursday night will address one of the most critical economic factors affecting the country – but the content is likely to disappoint America's unemployed.
Last week's jobs report showed zero job growth in August, and the unemployment rate held at 9.1%, increasing pressure on Washington to deliver relief for the jobless.
But analysts warn not to expect any revolutionary new developments on how to improve the country's weak employment outlook.
"I don't believe we are going to be slack-jawed by the speech," Larry Sabato, director of the Center of Politics at the University of Virginia, told MarketWatch.
President Obama and the White House have only previewed some of the details. The president is expected to propose a $300 billion job creation plan delivered through tax cuts, infrastructure spending and state and local government aid.
President Obama faces strong opposition from congressional Republicans who vehemently oppose more government spending when the country is already more than $14 trillion in debt. He'll also face many skeptics who see small business hiring as the only way to successfully cut the country's unemployment rate.
"His basic mistake is assuming that government can create jobs, which it really can't,"
said Money Morning Global Investment Strategist Martin Hutchinson. "I don't expect much."
What to Expect in Obama's Jobs Speech
President Obama's jobs speech will likely contain a few new ideas and several retreads of old ones.
Some expected proposals include:
- Infrastructure: President Obama told a Detroit audience Monday the package would include projects like road and bridge rebuilding to employ construction workers.
- New Worker Credits: The federal government could offer a tax credit of several thousand dollars to companies that increase their net number of workers.
- Job Training: The government could offer job-training programs for the long-term unemployed, modeled on a similar program in Georgia.
- Payroll Tax Break: The president has already mentioned his desire to extend through 2012 the reduction on the tax that workers pay into Social Security, which was reduced from 6.2% to 4.2% for 2011.
Nearly half the stimulus proposed in Obama's jobs speech would come from tax cuts, including a decrease in what employers pay. Trimming employers' obligations could open up payrolls for hiring.
"If he's going to spend $300 billion, the most useful thing would be to extend the social security tax relief, but make it employers rather than employees — that would cut the cost of hiring and bring at least a few more short-term job gains," said Hutchinson.
President Obama next week will meet with Congress to discuss a deficit-cutting proposal that will offset the jobs package cost, according to Bloomberg.
In a preview of the battle to come, Republican leaders pounced on Friday's poor job creation numbers.
The bad news shows that the president's "record on job creation and fiscal responsibility is abysmal," Rep. Paul Ryan, R-WI, told USA Today. "Since taking office, the president's policies have made a difficult situation worse."
One Tea Party Republican, Joe Walsh, R-IL, said he wouldn't even attend President Obama's jobs speech, preferring instead to host a small business forum in Illinois.
"I don't see the point of being a prop for another of the president's speeches asking for more failed stimulus spending and more subsidies for his pet projects," Walsh said in a statement.
Ultimately, it may not matter what President Obama says Thursday night with the majority of Republicans so obviously inclined to object to almost anything he proposes as they lay the groundwork for unseating him in 2012.
"[President Obama's jobs speech] can't change the fundamental fact of politics right now, which is that the two parties disagree on the most profound question in Washington," wrote Bloomberg View columnist Ezra Klein. "It's not: How do we fix the economy? It is: Who should win the next election?"
President Obama's jobs speech will air live Thursday at 7 p.m. EDT.
News and Related Story Links:
- Money Morning:
June's Abysmal Jobs Report is Just the Beginning
Obama to play small-ball, constrained by gridlock
- Bloomberg News:
Obama Said to Seek $300 Billion Jobs Package
- USA Today:
Obama and jobs: The key to re-election