Obama Requests Joint Session of Congress for Jobs Speech

President Barack Obama
President Barack Obama, center, tours the Automotive Training program at Northern Virginia Community College in Alexandria, Virginia, on June 8, 2011. Photographer: Jim Lo Scalzo/Pool

President Barack Obama has requested a joint session of Congress on Sept. 7 for a prime-time address to unveil his proposals to promote job growth.

The request would place Obama in a forum that presidents traditionally reserve for their annual State of the Union addresses and momentous occasions such as national crises as he opens the fall political season with a new economic agenda.

In a letter to House Speaker John Boehner, Obama said he wants to announce his initiatives to create jobs and jump-start the economy in an address at 8 p.m. Washington time.

“It is my intention to lay out a series of bipartisan proposals that the Congress can take immediately to continue to rebuild the American economy by strengthening small businesses, helping Americans get back to work, and putting more money in the paychecks of the middle class and working Americans, while still reducing our deficit and getting our fiscal house in order,” Obama wrote.

Obama confronts Republicans in Congress who already have signaled resistance to additional federal spending. Republicans won control of the House from Democrats in 2010 on a campaign that stressed criticism of Obama’s economic stewardship and the $830 billion stimulus he pushed through Congress in 2009.

Kevin Smith, a spokesman for Boehner, didn’t have any immediate comment about Obama’s request.

Republican Debate

The speech will be the same night and time that eight Republican presidential candidates are scheduled to debate at the Ronald Reagan Presidential Library in Simi Valley, California.

Republican National Committee Chairman Reince Priebus said in a message on Twitter that Obama’s plan to give the address on the night of the debate is “further proof” that the Obama White House “is all politics all the time.”

White House Press Secretary Jay Carney said the schedule overlap “is coincidental” and the speech scheduling depended on the congressional calendar. Asked at a White House briefing whether the administration intended to interfere with the Republican debate, Carney said, “No, of course not.”

He said there are “many channels” available for Americans who wish to watch both the presidential speech and the Republican debate, which he characterized as “one of many” scheduled for the primary campaign.

Joint Session

Besides his annual State of the Union addresses, Obama used the forum of a joint session of Congress once before, in September 2009, when he was prodding lawmakers to act on his proposal to overhaul the U.S. health-care system.

Among the provisions Obama has been considering for his jobs agenda are more infrastructure spending, tax incentives to spur hiring, a reduction in the employer portion of the payroll tax and changes to unemployment insurance to subsidize worker retraining, according to people familiar with discussions.

Obama has spent much of the year pressing Congress to act on a familiar set of plans: renewal of a 2-percentage-point cut in the employee-paid portion of the payroll tax and extended unemployment benefits, which are both scheduled to expire on Dec. 31; establishment of an infrastructure bank to fund public works spending; ratification of free-trade deals; and overhauling patent law. Obama has said those also will remain priorities.

Economic Challenges

Obama said in his letter that the nation, with an unemployment rate of 9.1 percent, faces “unprecedented” economic challenges. More than two years after the recession’s official end, the jobless rate is just one percentage point below its post-financial crisis peak of 10.1 percent, which it reached in October 2009.

Concern about the economy has increased as growth weakened during the first half of the year to its slowest pace of the recovery and financial markets turned tumultuous amid concern about the European debt crisis.

The signs of weakness have led private economists to increase their forecasts for the unemployment rate next year, when Obama faces re-election. The median forecast for unemployment during next year’s fourth quarter is 8.5 percent, according to 51 economists surveyed by Bloomberg News Aug. 2 through Aug. 10.

Since World War II, no U.S. president has won re-election with a jobless rate above 6 percent, with the exception of Ronald Reagan, who faced 7.2 percent unemployment on Election Day in 1984. The jobless rate under Reagan had come down more than 3 percentage points during the prior two years.

Administration Forecast

The administration will give its updated forecast on the economy and the deficit tomorrow in its mid-session budget review.

In his letter to Boehner and Senate Majority Leader Harry Reid, a Nevada Democrat, Obama wrote that on his three-day bus tour in Minnesota, Iowa and Illinois in mid-August, he “heard a consistent message: Washington needs to put aside politics and start making decisions based on what is best for our country and not what is best for each of our parties in order to grow the economy and create jobs. We must answer this call.”

Melissa Giller, a spokeswoman for the library’s foundation, and John F. Harris, the editor-in-chief of Politico, which is sponsoring the debate with NBC News, didn’t immediately respond to e-mails seeking comment on whether the timing will be changed.

Joel Prakken, senior managing director of Macroeconomic Advisers LLC in St. Louis, said he doesn’t “have high hopes -- really any hopes” of a significant boost to economic growth from Obama’s latest initiatives.

Weak Demand

“We just don’t think that can make up for the fact that in the private sector demand is so weak right now,” said Prakken, who published an Aug. 24 analysis of Obama’s options based on media reports of items under consideration.

Still, Michael Greenstone, an economics professor at the Massachusetts Institute of Technology and former chief economist for Obama’s Council of Economic Advisers, said tax incentives for hiring could by themselves put hundreds of thousands of people back to work at a cost of $30 billion.

A $5,000 tax credit for new hires combined with a five-percentage-point reduction in payroll taxes on the net increase of wages paid by a business would stimulate 900,000 additional new jobs, according to his analysis. The tax break would also wind up subsidizing about 5.1 million new hires that Greenstone forecasts will occur without the incentives. Consequently, the cost per additional job would be about $35,000 apiece, he said.

The White House hasn’t disclosed how a tax incentive for new hires would be structured, and its impact and cost would depend on details such as the amount of a credit.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE