The Caucus: White House Would Cut Tax Breaks to Pay for Jobs Plan

Philip Scott Andrews/The New York TimesPresident Obama announced that he would send his proposed jobs legislation to Congress on Monday.

2:24 p.m. | Updated The White House said on Monday that it would cover most of the cost of his payroll tax cut and other job initiatives by limiting the deductions that can be claimed on the tax returns of wealthier taxpayers.

President Obama, repeating what is clearly going to be the mantra for his stump speeches this fall, called on lawmakers Monday to “pass this bill” — his $447 billion jobs package.

At the White House, his budget director described how the administration would propose to pay for the plan, as the president has promised to do.

Jack Lew, the director of the White House Office of Management and Budget, said the bulk of the plan –- $400 billion over 10 years — would be raised by limiting the itemized deductions, such as those for charitable contributions and other expenditures, that may be taken by individuals making more than $200,000 a year and families making over $250,000 a year. The rest would come from provisions affecting oil and gas companies, hedge funds, and the owners of corporate jets.

Mr. Lew said that the Congressional panel charged with finding at least $1.2 trillion in savings this fall as part of the agreement to raise the debt ceiling will have the option of accepting the payment proposals submitted by Mr. Obama, or proposing new ones of their own.

Republicans were quick to signal their continuing opposition to the tax increases that Mr. Lew described, which have been suggested by the administration before.

Brendan Buck, spokesman for House Speaker John A. Boehner of Ohio, said the White House plan was not showing a “bipartisan spirit.”

Representative Eric Cantor of Virginia, the House majority leader, said, “I sure hope that the president is not suggesting that we pay for his proposals with a massive tax increase at the end of 2012 on job creators.” If Mr. Obama’s bill resembled the 2009 stimulus plan, he said, “I don’t believe that our members are going to be interested in pursuing that; I certainly am not.”

Like that stimulus plan, Mr. Obama’s jobs bill is made up largely of tax cuts, such as the expanded reductions of the payroll taxes that finance Social Security. The White House wants to cut both employee and employer contributions in half next year, putting more money in the pockets of all wage earners and on the bottom line of most smaller companies.

Mr. Obama, speaking in the Rose Garden, held up a copy of the American Jobs Act, which will be sent to Congress on Monday evening. Flanked by people from across the country who he said would be helped by the law if it passes, the president struck tones similar to those of his big jobs speech on Thursday.

“On Thursday I told Congress that I’ll be sending them a bill called the American Jobs Act,” Mr. Obama said, holding up a folder. “Well, here it is.”

Mr. Obama said the jobs act was “based on ideas from both Democrats and Republicans.” Americans, he said, cannot afford to wait 14 months until the next election for lawmakers to act, particularly given the dire economic straits and the high unemployment rate.

“We’ve got a world economy that’s full of uncertainty right now,” Mr. Obama said. “Some events are beyond our control.” By contrast, he said, his jobs bill is “something we can control.”

Mr. Obama is heading to Ohio and North Carolina this week to push his jobs plan. On Tuesday, in Columbus, Ohio, Mr. Boehner’s home state, he will argue once again that Congress should act; he will be making a similar pitch in the Raleigh-Durham area of North Carolina on Wednesday. While the president won both states in 2008, they are expected to be highly competitive in next year’s election.

This post has been revised to reflect the following correction:

Correction: September 12, 2011

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