United States-Economy

Obama job plan faces rough ride from Republicans

Reuters/Larry Downing

Republican members of the US House of Representative sat in silence on Thurday as US President Barack Obama outlined a 321-billion-euro job creation plan aimed at boosting the stalled American economy. 

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In a speech to a rare joint session of Congress, Obama gave details of  a plan which he said would put people back to work and more money into the pockets of workers.

It includes a 36-billion-euro programme to invest in highways, railroad and airport modernisation which officials say will provide jobs for hundreds of thousands of construction workers.

Obama also put forward a 21.6-billion-euro program to modernise 35,000 public schools and a 35-billion-euro plan to reform and extend insurance payments for the long-term unemployed.

If passed by Congress, the plan could boost growth by three per cent in 2012, create more than one million jobs and reduce the unemployment figures by half a percentage point.

But it faces a rough ride in the House of Representatives which is dominated by the Republican Party.

The plan, which outlines a large role for the government in stimulating the economy, has already set up a clash with Republican frontrunners for the 2012 presidency Mitt Romney and Rick Perry who say Obama is out of depth on the economy.

The Republicans are opposed to new spending which is not balanced by immediate budget cuts.

Obama will ask a congressional supercommittee, which met for the first time on Thursday and is mandated to cut spending by one trillion euros, to seek further budget cuts to offset the new spending.

And he pledged to unveil a new plan to cut the long-term deficit on 19 September.

“These are difficult years for our country,” he said in a plea for unity in his speech before Congress. “But we are Americans. We are tougher than the times that we live in, and we are bigger than our politics.”

Meanwhile, International Monetary Fund chief Christine Lagarde welcomed the job plan.

"Countries must act now and act boldly to steer their economies through this dangerous new phase of the recovery," she said in a speech in London.

 

 

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