White House proposes $467-billion plan to pay for jobs bill

The Obama administration has proposed a $467-billion package of savings, including changing how deductions count for wealthy income-tax payers, to offset the cost of its proposed jobs package, officials announced Monday.

At a televised briefing, Jack Lew, director of the White House Office of Management and Budget, outlined the package, which is being sent to Congress along with the $447-billion jobs bill. The extra $20 billion is designed to create a cushion to make sure the jobs plan is fully paid for as the president has promised, Lew said.

“In order to invest in jobs and growth, we’re going to have to pay for it,” Lew told reporters at the news session, which included White House Press Secretary Jay Carney.

The proposal includes limiting some deductions for those earning at least $200,000 a year, or for families, $250,000, a change that would save $400 billion over 10 years, Lew said. It also includes changing the tax rules on carried interest to treat it as ordinary income, removing some tax breaks for the oil and gas industry, and changing how depreciation is calculated for aircraft, he said.

The proposal is similar to items rejected by congressional Republicans, who argue the proposed changes are effectively tax increases, which they oppose. It was politically unclear whether the GOP lawmakers would be willing to back tax changes that they had previously spurned to pay for a jobs package, parts of which they question as an unpalatable spending stimulus package.

Complicating the issue is the mandate for a congressional select committee to come up with $1.5 trillion in federal spending cuts. To pay for the jobs package with just cuts would add an additional $447 billion, bringing the total to almost $2 trillion. If Congress accepts the president’s $467-billion offset jobs proposal, the items could not be used to lower spending in the congressional package.

The Obama administration will propose a complete package of cuts next week, Carney said, pledging the administration would “overachieve” the goals.

The president has been speaking forcefully in recent days about the need to pass his jobs package, and is expected to continue doing so during scheduled trips this week to Ohio and North Carolina.

Carney continued that theme by arguing that Congress should quickly pass the bill, but he noted that there will be “plenty of consultations going forward” ... and that the “conversation will continue once” the bill hits Congress.