Lawmakers, White House regroup on jobs

[October 12, 2011]  WASHINGTON (AP) -- Congress and the White House face the choice of continued fighting or a shift toward bipartisan bargaining after the Senate voted to kill President Barack Obama's $447 billion jobs plan.

They're likely to do both as they seek to produce results sought by a discontented public while also drawing bright political lines for voters as the 2012 campaign heats up.

Obama's plan died at the hands of Senate Republicans on Tuesday, even though the president had been campaigning for it across the country for weeks. The $447 billion plan died on a 50-49 tally in the 100-member Senate, falling well short of the 60 votes needed to crack a filibuster by Republicans opposed to its stimulus-style spending and tax surcharge for the very wealthy.

The tally had been 51-48 but Majority Leader Harry Reid, D-Nev., switched his vote to "nay" to reserve the right to force a re-vote. Sen. Tom Coburn, R-Okla., is recovering from surgery and did not vote.

Now, the White House and leaders in Congress are 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 on Wednesday, both the House and Senate are poised to approve long-stalled trade pacts with Korea, Panama and Colombia.

"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."

In the weeks and months ahead, 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. Further complicating matters is a deficit "supercommittee" that is supposed to come up with $1.2 trillion or more in deficit savings -- some of which Democrats may want to claim for jobs initiatives.

Tuesday's tally also shows that Republicans believe they have little to fear by tangling with Obama.

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 also are hopeful of ultimately garnering votes for the approval of infrastructure spending and tax credits for businesses that hire unemployed veterans.

Obama's plan would have combined 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 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.

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.

"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, R-Ky., said Tuesday, adding that 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.

Leaders of the GOP-controlled House have signaled they support tax cuts for small businesses and changes to jobless insurance to allow states to use unemployment funds for on-the-job training. And they've indicated they'll be willing to accept an extension of cuts to the Social Security payroll tax. But stimulus-style spending is a nonstarter with the tea party-infused chamber.

"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, R-Ohio, said after the vote.

[Associated Press; By ANDREW TAYLOR]

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