Obama’s jobs plan – A political and economic reaction

9th September 2011

The American Jobs Act includes $140bn for building roads, bridges and other major infrastructure projects that would put hundreds of thousands into work, $70bn in tax breaks for small businesses, tax credits for companies taking on military veterans, tax and training for the long-term jobless, and aid to states so that they do not have to lay off 280,000 teachers, as well as other workers.

It also includes infrastructure projects include repairing and modernising 35,000 schools. The biggest expenditure, $175bn for a 50 per cent cut in payroll tax.

But there is clearly going to be a stand-off as many Republicans boycotted the speech and are unhappy with many aspects of the plan.

Nationally the Republican's have already dismissed the plan as a re-election speech as ABC News reports here.

It quotes Senate minority leader Mitch McConnell saying: "The first stimulus didn't do it. Why would another one? This is one question that the White House and a number of Democrats clearly don't want to answer. The problem here isn't the politics. It's the policy."

Fund managers say a lot will depend on the political arguments, though they see hazards for the Republicans in opposing the full package.

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