Before a joint session of Congress, President Obama laid out a $447 billion package of tax cuts and new government spending Thursday night to help stimulate the economy and create new jobs. His speech comes at a time when 14 million people are unemployed and another 8.8 million are working part-time but seeking full-time work. The official unemployment rate stands at 9.1 percent, and the White House is predicting the rate will not fall below six percent until 2017. The jobs crisis is particularly severe for African Americans, who face an unemployment rate that soared to 16.7 percent in August—the highest it’s been since 1984. We speak with Dedrick Muhammad, senior director for economic programs for the NAACP, and Scott Paul, founding executive director of the Alliance for American Manufacturing. [includes rush transcript]
This is a rush transcript. Copy may not be in its final form.
JUAN GONZALEZ: Before a joint session of Congress, President Obama laid out a $447 billion package of tax cuts and new government spending Thursday night to help stimulate the economy and create new jobs. The President’s speech comes at a time when 14 million people are unemployed and another 8.8 million are working part-time but seeking full-time work. The official unemployment rate stands at 9.1 percent, and the White House is predicting the rate will not fall below six percent until possibly 2017. The job crisis is particularly severe for African Americans. The black unemployment rate soared to 16.7 percent in August, the highest it’s been since 1984.
On Thursday night, Obama urged Congress to quickly pass the jobs package.
PRESIDENT BARACK OBAMA: The purpose of the American Jobs Act is simple: to put more people back to work and more money in the pockets of those who are working. It will create more jobs for construction workers, more jobs for teachers, more jobs for veterans, and more jobs for long-term unemployed. It will provide—it will provide a tax break for companies who hire new workers, and it will cut payroll taxes in half for every working American and every small business. It will provide a jolt to an economy that has stalled and give companies confidence that if they invest and if they hire, there will be customers for their products and services. You should pass this jobs plan right away.
AMY GOODMAN: President Obama proposed extending unemployment insurance at a cost of $49 billion, modernizing schools for $30 billion, and investing in transportation infrastructure projects for $50 billion. But the bulk of his proposal was made up of $240 billion in tax relief by cutting payroll taxes for employees in half next year and trimming employer payroll taxes, as well.
Obama also called on fellow Democrats to support cuts to Medicare, an initiative backed by many Republican lawmakers.
PRESIDENT BARACK OBAMA: Now, I realize there are some in my party who don’t think we should make any changes, at all, to Medicare and Medicaid, and I understand their concerns. But here’s the truth. Millions of Americans rely on Medicare in their retirement. And millions more will do so in the future. They pay for this benefit during their working years. They earn it. But with an aging population and rising healthcare costs, we are spending too fast to sustain the program. And if we don’t gradually reform the system, while protecting current beneficiaries, it won’t be there when future retirees need it. We have to reform Medicare to strengthen it.
AMY GOODMAN: Moments later, Obama said tax increases on the wealthy must also be considered.
PRESIDENT BARACK OBAMA: I’m also well aware that there are many Republicans who don’t believe we should raise taxes on those who are most fortunate and can best afford it. But here is what every American knows. While most people in this country struggle to make ends meet, a few of the most affluent citizens and most profitable corporations enjoy tax breaks and loopholes that nobody else gets. Right now, Warren Buffett pays a lower tax rate than his secretary—an outrage he has asked us to fix. We need a tax code where everyone gets a fair shake and where everybody pays their fair share. And by the way, I believe the vast majority of wealthy Americans and CEOs are willing to do just that, if it helps the economy grow and gets our fiscal house in order.
JUAN GONZALEZ: President Obama also reiterated his call for Congress to approve three controversial so-called free trade agreements.
PRESIDENT BARACK OBAMA: Now it’s time to clear the way for a series of trade agreements that would make it easier for American companies to sell their products in Panama, in Colombia and South Korea, while also helping the workers whose jobs have been affected by global competition. If Americans can buy Kias and Hyundais, I want to see folks in South Korea driving Fords and Chevys and Chryslers. I want to see more products sold around the world stamped with the three proud words: "Made in America." That’s what we need to get done.
AMY GOODMAN: To talk more about President Obama’s speech and the job crisis, we’re joined by two people. Dedrick Muhammad, senior director for economic programs for the NAACP, is joining us from the studios of Maryland Public Television just outside Baltimore. And in Washington, D.C., Scott Paul is with us, founding executive director of the Alliance for American Manufacturing.
We welcome you both to Democracy Now! Dedrick Muhammad, the unemployment rate is at record highs and has, to say the least, been a massive problem, especially in the African-American community: 17 percent unemployment, 19 percent for African-American men, in the 40 percent range for young African-American men. Do you think President Obama’s plan goes far enough?
DEDRICK MUHAMMAD: President Obama’s plan doesn’t go far enough to address that issue—I mean that issue of the racial-economic inequality, how African Americans have had twice the unemployment rate of white Americans for the last 40 years. I don’t think President Obama was even focused on addressing that piece. But I will say that President Obama’s plan was bolder than I thought it would be, was investing more than I thought it would in average Americans, and I think is a step in the right direction but has to be followed by some other steps.
JUAN GONZALEZ: Well, Scott Paul is the founding director of the Alliance for American Manufacturing. Your response to the President’s proposal and the likelihood of any aspects of his plan actually being passed?
SCOTT PAUL: Well, Juan, I think that’s the real question. And I think the President said, "Pass this bill," at least 12 times, if not more. And that’s my concern, is that I—this plan is bolder than I thought it would be. It’s not the way I think some progressives would have constructed it. But I actually think if you look at the assistance that’s provided for middle-class workers, for the working poor, in forms of tax cuts, and also for the investments in our schools and our infrastructure, it actually provides more bang for the buck in the short term than the original Recovery Act did back in 2009.
The question of whether the Republican House is going to pass any of this is entirely different, and I think that’s why the President’s out there for the next couple of weeks, going into the country and saying, "We need to focus on our economy now." And we know that voters of all stripes—Democrats, Republicans, independents—vastly favor getting our economy on back, creating jobs over deficit reduction, and so I hope this enthusiasm for a jobs plan continues, and I do hope that it’s not overwhelmed when the President announces his long-term deficit reduction plan over the next couple of weeks, that that becomes the focus. I think the focus needs to stay on jobs, both from an economic imperative and also from a political imperative.
JUAN GONZALEZ: Well, but the bulk of the plan is on—in terms of reduction of the payroll tax, and it’s not quite clear in the coverage of this that the President is actually talking about reducing the share that both workers and employers contribute to the Social Security tax. In essence, isn’t this borrowing from what should be the Social Security fund to be able to stimulate the economy at this point and possibly creating future problems down the road for Social Security?
SCOTT PAUL: No question about it, and that is a concern. But I think the hope is that if we get the unemployment rate down, we get more people working, we’re able to replenish that fund. I mean, I think the payroll tax cut has some merit. It’s not the, from my perspective, the most important part of his plan. I think the investment in school construction and infrastructure will have much more of an impact. I also have to say that the idea of targeting some tax assistance towards hiring unemployed veterans who are returning and also the long-term unemployed and ending discrimination against them are critically important. That’s something that obviously has been missing the last couple of years. That addresses vulnerable populations. And those aspects of the plan, I hope, are pushed forward aggressively.
AMY GOODMAN: And talking about passing all the trade deals?
SCOTT PAUL: Well, I think that’s a problem. And the idea that any of these free trade deals are going to create jobs in the short term or the long term, they would have to defy history in order to do that. Most of the free trade agreement arrangements we’ve entered into have been failures. I don’t see any reason to believe that things would change with Korea, Colombia or with Panama. I think that if the administration wants to focus on trade, an area where they could do that would be addressing some of China’s mercantilism, balancing that trade relationship. We run a $26, $27 billion monthly trade deficit with China. And to be honest, that’s where our manufacturing jobs are going. If there’s a trade focus from the White House, I wish it were on that, rather than on these free trade deals, which will have, at best, pretty much a wash for workers. It will benefit some, it will devastate some others. But it’s not going to be any sort of measure that will reduce the unemployment rate or get our economy back on track. I think it’s actually a pretty wasted effort at this point, and I’m sorry to see that they’re pushing them so hard.
JUAN GONZALEZ: And Dedrick Muhammad, what would you have preferred to see in terms of the President’s proposals, especially given the higher unemployment rate, especially among African Americans, also among Latino Americans, and also in terms of low-wage workers?
DEDRICK MUHAMMAD: Yeah, well, first, we’ll say that one thing I’m glad that is part of his proposal is something that NAACP, through our president, Benjamin Todd Jealous, has been talking to the President about, about putting aside money and this $4,000 tax credit to help those who have been long-term unemployed, because we really do see that as a growing crisis, where people in a recession, looks like, could be permanently dislocated from the job market. I think—as I said previously, I think this is a step of dealing with some of the immediate impacts of the recession. I think that’s why there was so much money put into the payroll tax cut, because that’s the quickest way to get some money as a brief stimulus.
But I think, long term, there is a long-term problem. Like, we’re not just trying to pull out of the Great Recession. We’re really pulling out of a great, let’s say, retraction of the middle class for the last, arguably, 30 years. And there’s going to have to be follow-up steps. And it can’t just be—I think people thought the American Recovery and Reinvestment Act, that’s going to solve everything. I hope people don’t believe that the American Jobs Act is going to solve anything. We’ve been going in the wrong direction 30 years, concentrating wealth at the highest. We need to have a great—at least 10 years of focused, progressive policy, that hopefully, for the first time, can create a robust middle class that’s inclusive of all Americans.
AMY GOODMAN: Dedrick Muhammad, we want to thank you for being with us, of the NAACP. Scott Paul, Alliance for American Manufacturing, is staying with us, as we turn our focus to the World Trade Center, the new World Trade Center, what’s going up downtown Manhattan at Ground Zero, and relate it to President Obama’s speech around jobs. We’ll look at its tenants. We’ll look at the cost of the World Trade Center and the materials being used to build that World Trade Center—steel from Germany, the glass from China. Stay with us.