Obama says jobs plan will push for infrastructure spending

U.S. President Barack Obama said spending to rebuild the nation’s infrastructure is a key component of his plan to reignite the economy and boost hiring.

In a speech marking the U.S. Labor Day holiday, Obama told a Metro Detroit Central Labor Council rally today that the jobs agenda he’ll unveil in a speech to Congress on Sept. 8 will include proposals that previously have had support from both parties. He challenged Republicans to “put country before party” by backing quick action.

“We’ve got roads and bridges across this country that need rebuilding,” Obama said. “We’ve got more than 1 million unemployed construction workers ready to get dirty right now. There is work to be done and there are workers ready to do it. Labor’s on board, business is on board. We just need Congress to get on board.”

Obama will unveil his new jobs agenda as unemployment remains at 9.1 percent more than two years after the recession’s official end. The sluggish recovery from the worst recession since the Great Depression will be central issues as Obama runs for re-election next year. Republicans, who control the U.S. House, have signaled resistance to new spending that would add to the federal budget deficit.
Call for Action

Obama also said he’ll ask Republicans to “prove you’ll fight just as hard for tax cuts for middle class” Americans as they have for measures benefiting the wealthy and oil companies. “The time for action is now,” he said.

Before leaving for Detroit, Obama spent the weekend at Camp David, the presidential retreat in Maryland, putting the finishing touches on his address to Congress.

“The things that he’s talking about are some things that have been supported in the past by Republicans and Democrats,” Labor Secretary Hilda Solis said this morning on NBC’s “Today” program. Those include “infrastructure investment, helping to provide assistance to those dislocated workers, people who are out of work, who’ve been out of work for more than six months and longer, and also providing tax breaks for middle-class people, payroll taxes, and for businesses,” she said.

Obama’s visit today to Michigan follows a Sept. 2 Labor Department report that showed payrolls unexpectedly stalled last month. The median forecast in a Bloomberg News survey had called for a rise of 65,000.

The unemployment rate in Michigan was 10.9 percent in July, higher than the national average and down from a high of 14.1 percent in September 2009. The White House in June released a report that said that the $80 billion bailout of the auto industry and the emergence of General Motors Co. (GM) and Chrysler Group LLC from bankruptcy saved at least 1 million jobs. The administration estimates that the aid will cost taxpayers about $14 billion.

Obama highlighted the rescue of GM and Chrysler plants in his speech today, saying, “I’ve seen Detroit prove the cynics and the naysayers wrong.”

Labor groups are pressing Obama to seek major spending on infrastructure to create jobs. Unions were disappointed in Obama’s agreement with Republicans last December that extended Bush-era tax cuts for all Americans, including the wealthiest, and in the continuing efforts to cut federal spending by US$2.4 trillion.

“I’m hoping that he’ll be very bold” in his jobs’ proposal, AFL-CIO president Richard Trumka said of Obama last week on Bloomberg Television’s “Political Capital with Al Hunt.”

“American workers, whether they’re union or not union, are looking for leadership,” he said. “They don’t want excuses. They don’t want bipartisan crap.”

Trumka and Solis joined Obama at the rally today, which brought the president before a largely friendly crowd estimated by Detroit police at 13,000. Members of the audience chanted “four more years” as Obama took the podium.

“He’s doing a great job, but he has a tough battle to fight because Republicans are in charge of the House of Representatives,” said Jeffrey Ram, 65, a professor of physiology at Wayne State University in Detroit, who attended the rally.

Karen Porter, 52, of Detroit, who also attended the rally, said she has been unemployed for three years but doesn’t blame Obama. “I support him more than 100 percent,” she said.
Slow Recovery

Concern over the economy has increased as growth weakened during the first half of the year to its slowest pace of the recovery. U.S. stock futures fell, indicating that the Standard & Poor’s 500 Index may slide for a third day when trading reopens tomorrow, amid concern the world’s largest economy is weakening.

A poll conducted Aug. 24-25 for CNN found 65 percent of Americans disapprove of the way Obama is handling the economy, the highest level since he took office. Thirty-four percent said they approved. The margin of error is plus or minus 3 percentage points.

Since Congress resolved a months-long partisan standoff over the national debt limit by raising it on Aug. 2, Obama has pivoted to a public focus on boosting job growth. He spoke about jobs on a three-day bus tour through the Midwestern states of Minnesota, Iowa and Illinois, beginning Aug. 15.

Obama has spent much of the year pressing Congress to act on a familiar set of plans: renewal of a two-percentage-point cut in the employee-paid portion of the payroll tax and extended unemployment benefits, which are both scheduled to expire on Dec. 31; establishment of an infrastructure bank to fund public works spending; ratification of free-trade deals; and overhauling patent law. Obama has said those will remain priorities.

Recent signs of economic weakness have led private economists to raise forecasts for the unemployment rate next year. The median forecast for unemployment during next year’s fourth quarter, when the presidential election will be held, is 8.5 percent, according to 51 economists surveyed by Bloomberg News Aug. 2 through Aug. 10.

Since World War II, no U.S. president has won re-election with a jobless rate above 6 percent, with the exception of Ronald Reagan, who faced 7.2 percent unemployment on Election Day in 1984. The jobless rate under Reagan had come down more than 3 percentage points during the prior two years.