WASHINGTON — Anticipation of President Obama’s plan for creating jobs while cutting deficits, now heightened by the scheduling controversy over his prime time address to Congress next Thursday, has turned on an question: Will he go big and highlight his sharp differences with Republicans, or will he be pragmatic and downsize his ideas to get Republican votes?
The challenge for Mr. Obama is that he must do both.
Despite Republican opposition to spending measures or tax cuts to spur job creation and economic growth, the president is under pressure to fight for a significant stimulus program. The demands come not only from Democrats, but also from many economists, financial analysts and executives who fear a relapse into recession.
But as administration officials are well aware, another display of partisan gridlock this fall could again provoke a downgrade of the United States’ credit and market upheavals that would further batter consumer confidence.
Mr. Obama has said bipartisanship is his aim. Yet even the president’s letter asking to address Congress next Wednesday provoked sparring. House Speaker John A. Boehner insisted on the following day, and more than 24 hours later extended the official invitation, which the White House immediately accepted. The embarrassing episode bodes badly for the reception that Mr. Obama’s ideas will receive, and for the parties’ ability to reach a much more difficult agreement on budget priorities by December as required in the deficit reduction deal last month.
“It is my intention,” the president wrote, “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.”
People familiar with the White House’s planning say Mr. Obama will focus in his speech on the specifics of his immediate job-creation plans, but leave the details of his longer-term deficit reduction program for later. They say he does not want to dilute the political impact of his jobs message with controversies, especially with his Democratic base, over deficit-reduction ideas like raising the eligibility age for future Medicare recipients.
The signals from the White House suggest that Mr. Obama’s agenda will not be so bold as to satisfy many liberals clamoring for New Deal-style programs. On Tuesday, 68 progressive groups wrote to Mr. Obama urging him “to move beyond these half-measures designed to appeal to a narrow ideological minority who have repeatedly shown their unwillingness to negotiate.”
Still, they say Mr. Obama’s plan will be far more ambitious than would have been expected just months ago, given the weakened economy. He has concluded, Democrats say, that Republicans will oppose anything he proposes, and with an election looming, Mr. Obama must make clear what he stands for.
Expected among those stimulus proposals is an extension for another year of the payroll tax cut for workers that Mr. Obama and Republicans agreed to last December, which has meant $1,000 more this year for the average family. Mr. Obama has been considering whether to seek an expansion of the payroll tax cut for employers. And he is expected to propose a separate tax credit for employers who increase their payrolls.
The total cost could reach several hundred billion dollars. But the White House figures that tax cuts have the best chance of Republican support.
Yet Republicans say they oppose another round of stimulus measures, a stance consistent with their argument that Mr. Obama’s original $800 billion stimulus package was a failure. And despite their party’s longstanding support of tax cuts, Republican leaders say they are opposed to any revenue-losing proposals unless they are offset by equal spending cuts — a condition they did not make for extending the Bush-era tax cuts.
That sets up an opportunity, as Democrats see it, to saddle Republicans with the blame for a weak economy.
“The president wants to work with Republicans and Democrats to create jobs and grow the economy,” said Dan Pfeiffer, the White House communications director. “If nothing happens, it will be because Republicans in Congress made a conscious decision to do nothing. And that is a choice that will have tremendous consequences for the country.”
Mr. Obama also will propose added spending that Republicans are even more certain to oppose.
Much of the money would go to infrastructure projects. Mr. Obama is expected to again propose an infrastructure bank to support work on roads, bridges, airports, schools and other public works. Because such a bank would take up to 18 months to get under way, Mr. Obama has indicated he will propose other innovative ways to support such work quickly.
To hold down overall federal costs, and to avoid having to go to Congress, Mr. Obama and his advisers have been looking for ways to divert existing government money to purposes that will create jobs, especially in the hard-hit construction industry. School repairs and retrofitting buildings for energy efficiency will be a focus. And Mr. Obama is expected to argue that to the extent that states and local governments are relieved of school construction costs, they must avoid further layoffs of teachers.
For the long-term unemployed, the White House is considering a program like one in Georgia, which had Republican support there. The idea is to find temporary jobs for people at no expense to employers, providing them with on-the-job training while they receive unemployment compensation or a government stipend, in hopes of ultimately getting hired or finding a similar job elsewhere.
“It’s very important for the president to set forth his vision,” said Representative Chris Van Hollen of Maryland, the senior Democrat on the House Budget Committee. “I don’t think he should limit his vision to what may or may not pass the House of Representatives.”