ICA looks set for yet another double-pronged dose of government stimulus, after President Barack Obama launched his “American Jobs Act” late last night, and Fed chief Ben Bernanke hinted at more monetary easing.
Obama urged Congress to vote through his $447bn (£280bn) programme of tax cuts and government spending hikes, repeating the words “pass this plan” no fewer than 15 times during a 40-minute speech.
The President described the bill as uncontroversial and essential for the world’s largest economy.
“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.”
Companies that employ people who have spent more than six months looking for work will be granted a $4,000 tax credit, he said.
The mammoth costs of the new plan will not be funded by greater debts, Obama also pledged. In July, Congress was tasked with finding a further $1.5 trillion in savings by the end of the year.
“Tonight, I’m asking you to increase that amount so that it covers the full cost of the American Jobs Act,” Obama said, promising “a more ambitious deficit plan” to be released next week.
During a patriotic, rallying speech, Obama invoked the legacy of Abraham Lincoln and urged Americans to “win the battle to the top”.
“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 three proud words: ‘Made in America’,” he said, to one of many standing ovations and cheers from the assembled lawmakers.
Earlier in the evening Federal Reserve chairman Ben Bernanke said that the central bank would do everything within its powers to boost the ailing US economy, yet failed to specify a precise plan for another phase of monetary accommodation.
“The Federal Reserve will do all it can to help restore high rates of growth and employment in a context of price stability,” Bernanke told the Economic Club of Minnesota.
US Treasury Secretary Timothy Geithner was also party to yesterday’s chorus for stimulus. “The imperative remains to strengthen economic growth. Fiscal policy everywhere has to be guided by the imperatives of growth,” Geithner wrote in the Financial Times, while admitting that a repeat of 2009’s huge stimulus measures is not feasible.