Friday, October 14, 2011

Obama faces jobs bill roadblock in Congress (Reuters)

PITTSBURGH (Reuters) ? President Barack Obama conceded on Tuesday he may have to break up his jobs bill in the face of political paralysis in Washington that could thwart major action to spur hiring before the 2012 elections.

Obama has tried to put his Republican opponents on the spot by highlighting their opposition to his $447 billion proposal to create jobs at a time when high unemployment is becoming the dominant issue in early election campaigning.

But the plan looks set to fail in the U.S. Senate later on Tuesday with Republicans refusing to buckle and some Democrats signaling their opposition.

"If they don't pass the whole package we're going to break it up into constituent parts," Obama said in Pittsburgh in his most frank acknowledgment to date that the plan will not pass in its entirety.

Among measures which might be salvaged are a payroll tax cut which Obama wants to extend to avoid imposing an effective tax increase at a time wages have not been rising much. Obama's bill would also extend unemployment benefits for the long-term unemployed.

The U.S. unemployment rate has been above 9 percent since May.

Obama's visit on Tuesday to the industrial city of Pittsburgh, once a thriving steel center, was the latest stop in his tour to promote the jobs plan of swing states in advance of next year's election.

Republicans say the tour is aimed at saving his own job.

Obama's so-called Jobs Council, under the chairmanship of GE Chief Executive Officer Jeffrey Immelt, earlier delivered a report in which they proposed steps to foster U.S. innovation and make the country more attractive to foreign investment.

The suggestions include ramping up infrastructure spending, streamlining visa applications to keep science graduates in the United States, and changing student loans to encourage graduates to work for start-up companies.

But many of the recommendations would require support from Republicans to become law -- a potentially tall order in a divided Congress in which Republicans control the House of Representatives and Democrats hold the Senate. The Council made some of these proposals in its report in June.

LIKELY DEFEAT

Obama's 2012 re-election chances depend on his ability to spur the sluggish economic recovery and revive the nearly stagnant job market.

The president launched the jobs bill last month to try to persuade Americans that he had a plan to get them back to work after a string of gloomy economic data that has raised concerns the country could dip back into recession.

Even Wall Street is feeling the pinch, with a report from the New York State Comptroller showing that banker bonuses are likely to drop for the second year in a row.

"Right now, our economy needs a jolt," Obama said in later remarks in Pittsburgh.

"The Senate of the United States has a chance to do something about jobs -- right now -- by voting for the American Jobs Act. This is a moment of truth for the U.S. Senate."

However, the bill was headed for likely defeat, as his Democrats were expected to fall short of the 60 votes needed to clear a procedural hurdle in the Senate.

White House National Economic Council Director Gene Sperling said that the vote would highlight Republican obstructionism despite a public alarmed by high unemployment.

He, however, made clear the Obama administration's fallback option would be to offer the jobs plan piecemeal.

"If they (Republicans) choose not to give the support that will allow this to get 60 votes, if they choose to do that, then we'll come back piece after piece," Sperling told CNBC.

Several Democrats and nearly every Republican are expected to vote against the bill when it comes up for consideration in the Senate around 6 p.m. EDT (2200 GMT).

(Writing by Alister Bull; Additional reporting by Thomas Ferraro, Matt Spetalnick, Caren Bohan and Andy Sullivan; Editing by Philip Barbara, Bill Trott and Paul Simao)

Source: http://us.rd.yahoo.com/dailynews/rss/uscongress/*http%3A//news.yahoo.com/s/nm/20111011/ts_nm/us_usa_jobs

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