Washington, Oct 12: Senate Republicans voted Tuesday night to kill the jobs package President Barack Obama had spent weeks campaigning for across the country, a stinging loss at the hands of lawmakers opposed to stimulus-style spending and a tax increase on the very wealthy.
The $447 billion plan died on a 50-49 tally that garnered a majority of the 100-member Senate but fell well short of the 60 votes needed to keep the bill alive. The tally had been 51-48, but Senate Majority Leader Harry Reid switched his vote to “nay” so that he could force a future revote.
The demise of Obama's jobs package was expected, despite his campaign-style efforts to swing the public behind it. The White House and leaders in Congress were already moving on to alternative ways to address the nation's painful 9.1 percent unemployment, including breaking the legislation into smaller, more digestible pieces and approving long-stalled trade bills.
“Tonight's vote is by no means the end of this fight,” Obama said in a statement after the vote. “Because with so many Americans out of work and so many families struggling, we can't take ‘no' for an answer.”
The White House appears most confident that it will be able to continue a 2-percentage-point Social Security payroll tax cut through 2012 and to extend emergency unemployment benefits to millions of people—if only because, in the White House view, Republicans won't want to accept the political harm of letting those provisions expire.
White House officials are also hopeful of ultimately garnering votes for the approval of infrastructure spending and tax credits for businesses that hire unemployed veterans.
“Now it's time for both parties to work together and find common ground on removing government barriers to private-sector job growth,” House Speaker John Boehner said after the vote.
Democratic Sens. Ben Nelson of Nebraska and Jon Tester of Montana—both up for re-election next year in states where Obama figures to lose—broke with their party on Tuesday night's vote. Every Republican present opposed the plan.
Earlier in the day, Obama capped his weekslong campaign for the measure in an appearance typical of the effort—a tough-talking speech in Pennsylvania, a swing state crucial to his re-election. Like earlier appearances, it seemed aimed more at rallying his core political supporters heading into the election than changing minds on Capitol Hill.
“Any senator who votes no should have to look you in the eye and tell you what exactly they're opposed to,” Obama said to a labor union audience in Pittsburgh. “I think they'll have a hard time explaining why they voted no on this bill—other than the fact that I proposed it.”
Obama's plan would combine Social Security payroll tax cuts for workers and businesses and other tax relief totaling about $270 billion with $175 billion in new spending on roads, school repairs and other infrastructure, as well as unemployment assistance and help to local governments to avoid layoffs of teachers, firefighters and police officers.
Obama said that the plan—more than half the size of his 2009 economic stimulus measure—would be an insurance policy against a double-dip recession and that continued economic intervention was essential given slower-than-hoped job growth.
“Right now, our economy needs a jolt,” Obama said. “Right now.”
Unlike the 2009 legislation, the current plan would be paid for with a 5.6 percent surcharge on income exceeding $1 million. That would be expected to raise about $450 billion over the coming decade.
That millionaires proposal would hit about 392,000 households, according to an analysis by the Tax Policy Center, a Washington think tank. In 2013, the first year the tax would take effect, those wealthy households would see their taxes increase by an average of $110,500, according to the analysis.
“Democrats' sole proposal is to keep doing what hasn't worked—along with a massive tax hike that we know won't create jobs,” Senate Minority Leader Mitch McConnell said Tuesday, saying there are 1.5 million fewer jobs than when Obama's 2009 economic package became law. “Why on earth would you support an approach that we already know won't work?” McConnell said.
Just before the vote on Obama's jobs plan, the Senate passed legislation aimed at punishing China for keeping its currency undervalued against the dollar. Lower-valued currency helps Chinese exports at the expense, bill supporters say, of American jobs.
Next, both the House and Senate will turn Wednesday to approving trade agreements with Colombia, Panama and South Korea that could create tens of thousands of jobs, one of the few areas of agreement between Republicans and the administration on boosting the economy.
In coming weeks and months, Democrats promise further votes on jobs. But it remains to be seen how much of that effort will involve more campaign-stoked battles with Republicans and how much will include seeking common ground in hopes of passing legislation.
Leaders of the Republican-controlled House of Representatives have signaled they support tax cuts for small businesses and may be willing to accept an extension of cuts to the Social Security payroll tax. But stimulus-style spending is a nonstarter with House Republicans.
Tuesday's vote played out as disaffected crowds continued to occupy Wall Street, a square in Washington and parts of other cities around the country in protest of income inequality and related issues. AP