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Obama Jobs Creation Package Could Easily Top $300 Billion

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Sept. 5: President Barack Obama waves to supporters during a Labor Day speech at Detroit's Renaissance Center, headquarters of General Motors, in Detroit, Mich.AP

President Obama is expected to propose at least $300 billion in federal spending and tax cuts Thursday night to get Americans working again, including several items already suggested -- like a payroll tax cut extension through 2012 that would be worth about $110 billion.

Obama will lay out his plans during an early prime-time speech at 7 p.m. ET, scheduled to precede the Green Bay Packers-New Orleans Saints regular season opener. Republicans, who assailed some of the president's plans on Tuesday, as Congress returned, have not scheduled a rebuttal to follow the speech.

Among some of the items that would quickly add up are the payroll tax cut extension as well as $60 billion for extending unemployment benefits for another year; a highway bill worth $90 billion that the president proposed last month to extend but which has not gone anywhere; a $40 billion job training program; and a targeted payroll tax cut for employers to encourage new hiring worth about $30 billion. Other items could be extending a deal negotiated in 2011 to accelerate depreciation on new equipment and other tax breaks for businesses or perhaps a housing and mortgage fix.

Obama has also called for public works projects, such as school construction. Advocates of that plan have called for spending of $50 billion, but the White House proposal is expected to be smaller.

That would easily surpass a $300 billion price tag, and the proposals are probably closer to $400 billion to $500 billion. In a $15 trillion economy, $300 billion would be 2 percent of gross domestic product. 

The proposal comes as the employment report for August released on Friday showed no net job growth. The unemployment rate remained at 9.1 percent as fewer people looking for work applied for jobless benefits.

The White House insisted when it passed its $800 billion stimulus plan in February 2009 that unemployment would not rise above 8 percent. According to Recovery.gov, the administration's stimulus tracking website, the plan included $288 billion in tax cuts and benefits for families and businesses;  $224 billion in spending on entitlement programs like extending unemployment benefits and $275 billion for federal contracts, grants and loans for infrastructure projects. From its signing until nearly the end of last month, $711 billion had been paid from the law.

In June, the Congressional Budget Office noted that federal debt at the end of 2008 equaled roughly 40 percent of gross domestic product. It projected that by the end of fiscal year 2011, which is Sept. 30, the debt-to-GDP ratio will reach 70 percent.

As the president comes up with spending plans to rev up the economy, a bipartisan "super committee" is scheduled to meet on the same day to begin its quest to find $1.2 trillion in debt reduction over the next decade. If there is no agreement, automatic spending cuts will take effect, a prospect that lawmakers in both parties have said they would like to avoid.

Though Obama has said he intends to propose long-term deficit reduction measures to cover the up-front costs of his jobs plan, White House spokesman Jay Carney said Obama will be offering a short-term plan aimed at job creation.

"This will be primarily focused on the short-term need to take measures to grow the economy and create jobs, which is what the current economic situation calls for. It is certainly what the American people want to see happen. And the president believes that the initiatives he'll put forward should have bipartisan support," Carney told reporters on Monday.

He added that the package of proposals "will be paid for." 

In a letter to Obama on Tuesday, House Speaker John Boehner and Majority Leader Eric Cantor outlined possible areas for compromise on jobs legislation. Carney said the president has been discussing options with lawmakers on both sides of the aisle, but it was unclear whether Obama would meet with Republican legislators before the speech, as Boehner and Cantor requested in the letter.