Obama kicks off campaign with $50 billion jobs plan

By Steve Holland

MILWAUKEE (BestGrowthStock) – President Barack Obama, scrambling to jump-start job creation in a sluggish economy, proposed on Monday a six-year, $50 billion plan to rebuild aging roads, railways and airport runways.

“We are going to rebuild 150,000 miles of our roads — that’s enough to circle the world six times… We’re going to lay and maintain 4,000 miles of our railways — enough to stretch coast-to-coast,” Obama said.

Obama laid out the plan at a rousing labor rally where several thousand supporters cheered his every line, especially when he said the United States cannot have a strong economy without a strong middle class.

“I am going to keep fighting, every single day, every single hour, every single minute to turn this economy around,” he said.

The infrastructure plan is one of several initiatives that Obama, who is struggling to persuade Americans that his economic policies are working, is due to unveil this week.

With fellow Democrats facing punishment from recession-weary voters in November 2 congressional elections, Obama is under pressure to do more to create jobs and bring down the stubbornly high 9.6 percent unemployment rate, even as economists agree he has few good options left.

A centerpiece of his new plan to stimulate the recovery is a proposal for the U.S. Congress to increase and permanently extend a tax credit for business research and development.

The tax credit proposal, which was widely expected by investors, would cost $100 billion over 10 years. He is to lay out the plan on Wednesday in Cleveland.

Economists are skeptical any measures Obama takes now will make a significant difference in the $13.2 trillion U.S. economy and point out that investments in infrastructure typically do not stimulate the economy quickly.

While Obama declared some jobs would be created “immediately” under the plan, a senior Obama administration official said the proposed infrastructure overhaul would not have an immediate impact on the economy and said the first jobs would not be created until 2011.

“This is not a stimulus, immediate-jobs plan,” the official said told reporters on a conference call.

DOUBTS FROM DEFICIT HAWKS

The White House stressed the plan would not add to the record U.S. deficit, a key issue for voters.

The senior administration official said Obama is willing to pay for the plan by closing some tax loopholes for oil and gas companies “that they certainly don’t need.”

“This is a plan that will be fully paid for. It will not add to the deficit over time — we’re going to work with Congress to see to that,” Obama said.

But Obama faced skepticism from deficit hawks among Republicans, who many experts predict will make big gains in November, possibly winning control of the House of Representatives and maybe the Senate.

Senate Republican leader Mitch McConnell called it a “last-minute cobbled-together stimulus bill” and the Republican leader of the House, John Boehner, was equally dismissive.

“We don’t need more government ‘stimulus’ spending — we need to end Washington Democrats’ out-of-control spending spree, stop their tax hikes, and create jobs by eliminating the job-killing uncertainty that is hampering our small businesses,” Boehner said.

DETAILS OF PLAN

Under the infrastructure plan, Obama is proposing to:

– Rebuild 150,000 miles of roads;

– Construct and maintain 4,000 miles of rail;

– Rehabilitate or reconstruct 150 miles of runway and modernize the air traffic control system and;

– Set up an infrastructure bank to leverage private, state and local capital to invest in projects.

Transportation construction spending would likely help companies like equipment maker Caterpillar Inc, privately held engineering firm Parsons Corp, and conglomerate General Electric Co.

The administration official said a “substantial number of jobs” would be created by the infrastructure projects. Transportation experts say 35,OOO jobs are created for every $1 billion in transportation construction investment.

Obama used his appearance in Milwaukee — and a trip to Cleveland on Wednesday — to set the tone for the fall campaign. Monday’s Labor Day holiday marks the informal start of the election campaign season.

He argued that Democratic policies have stopped the bleeding and produced some economic growth, while Republicans have opposed him every step of the way.

“If I say the sky is blue, they say no,” he said.

Recalling his 2008 “Yes We Can” slogan, Obama said of Republicans: “Their slogan is ‘No We Can’t.’ No, no, no.”

“Yes we can,” the crowd yelled.

Obama’s visit to Cleveland promises to be more strategic. It is the city where Boehner, who would be House speaker if Republicans win the House, recently urged Obama to fire his economic team.

Other items that Obama could talk about this week are a payroll tax holiday, extending tax cuts for the middle class and increasing money for clean energy.

(Writing by Steve Holland and Ross Colvin, additional reporting by Lucia Mutikani, Ross Colvin, Charles Abbott, Alister Bull and John Crawley; editing by Philip Barbara)

Obama kicks off campaign with $50 billion jobs plan