U.S. Senate defeats Obama's jobs bill

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(AP) - United against Barack Obama, SenateRepublicans voted Tuesday night to kill the jobs package thepresident had spent weeks campaigning for across the country, astinging loss at the hands of lawmakers opposed to stimulus-stylespending and a tax increase on the very wealthy.

The $447 billion plan died on a 50-49 tally that garnered amajority of the 100-member Senate but fell well short of the 60votes needed to keep the bill alive. The tally had been 51-48, butSenate Majority Leader Harry Reid, D-Nev., switched his vote to"nay" so that he could force a future revote.

The demise of Obama's jobs package was expected, despite hiscampaign-style efforts to swing the public behind it. The WhiteHouse and leaders in Congress were already moving on to alternativeways to address the nation's painful 9.1 percent unemployment,including breaking the legislation into smaller, more digestiblepieces and approving long-stalled trade bills.

"Tonight's vote is by no means the end of this fight," Obamasaid in a statement after the vote. "Because with so manyAmericans out of work and so many families struggling, we can'ttake `no' for an answer."

The White House appears most confident that it will be able tocontinue a 2-percentage-point Social Security payroll tax cutthrough 2012 and to extend emergency unemployment benefits tomillions of people - if only because, in the White House view,Republicans won't want to accept the political harm of lettingthose provisions expire.

White House officials are also hopeful of ultimately garneringvotes for the approval of infrastructure spending and tax creditsfor businesses that hire unemployed veterans.

"Now it's time for both parties to work together and findcommon ground on removing government barriers to private-sector jobgrowth," House Speaker John Boehner, R-Ohio, said after the vote.

Democrats Ben Nelson of Nebraska and Jon Tester of Montana -both up for re-election next year in states where Obama figures tolose - broke with their party on Tuesday night's vote. EveryRepublican present opposed the plan.

Earlier in the day, Obama capped his weekslong campaign for themeasure in an appearance typical of the effort - a tough-talkingspeech in a swing state crucial to his re-election. Like earlierappearances, it seemed aimed more at rallying his core politicalsupporters heading into the election than changing minds on CapitolHill.

"Any senator who votes no should have to look you in the eyeand tell you what exactly they're opposed to," Obama said to aunion audience in Pittsburgh. "I think they'll have a hard timeexplaining why they voted no on this bill - other than the factthat I proposed it."

Democrats were not wholly united behind the measure. In additionto Nelson and Tester, Sens. Jim Webb, D-Va., Joe Manchin, D-W.Va.,and Joe Lieberman, a Connecticut independent who aligns withDemocrats, said they oppose the underlying measure despite votingto choke off the filibuster.

Obama's plan would combine Social Security payroll tax cuts forworkers and businesses and other tax relief totaling about $270billion with $175 billion in new spending on roads, school repairsand other infrastructure, as well as unemployment assistance andhelp to local governments to avoid layoffs of teachers,firefighters and police officers.

Obama said that the plan - more than half the size of his 2009economic stimulus measure - would be an insurance policy against adouble-dip recession and that continued economic intervention wasessential given slower-than-hoped job growth.

"Right now, our economy needs a jolt," Obama said. "Rightnow."

Unlike the 2009 legislation, the current plan would be paid forwith a 5.6 percent surcharge on income exceeding $1 million. Thatwould be expected to raise about $450 billion over the comingdecade.

"Democrats' sole proposal is to keep doing what hasn't worked -along with a massive tax hike that we know won't create jobs,"Senate Minority Leader Mitch McConnell, R-Ky., said Tuesday, sayingthere are 1.5 million fewer jobs than when Obama's 2009 economicpackage became law. "Why on earth would you support an approachthat we already know won't work?" McConnell said.

The White House and Democratic leaders, however, were pleasedthat the great majority of Democrats voted for the plan. Supportamong Democrats was shored up by replacing Obama's tax increases -particularly a proposal to limit the value of itemized deductionsfor families making more than $250,000 - with the surcharge onannual income over $1 million.

That millionaires proposal would hit about 392,000 households,according to an analysis by the Tax Policy Center, a Washingtonthink tank. In 2013, the first year the tax would take effect,those wealthy households would see their taxes increase by anaverage of $110,500, according to the analysis.

Just before the vote on Obama's jobs plan, the Senate passedlegislation aimed at punishing China for keeping its currencyundervalued against the dollar. Lower-valued currency helps Chineseexports at the expense, bill supporters say, of American jobs.

Next, both the House and Senate will turn Wednesday to approvingtrade agreements with Colombia, Panama and South Korea that couldcreate tens of thousands of jobs, one of the few areas of agreementbetween Republicans and the administration on boosting the economy.

In coming weeks and months, Democrats promise further votes onjobs. But it remains to be seen how much of that effort willinvolve more campaign-stoked battles with Republicans and how muchwill include seeking common ground in hopes of passing legislation.

Leaders of the GOP-controlled House have signaled they supporttax cuts for small businesses and changes to jobless insurance toallow states to use unemployment funds for on-the-job training. Andthey've indicated they'll be willing to accept an extension of cutsto the Social Security payroll tax. But stimulus-style spending isa nonstarter with the tea party-infused chamber.

Tuesday's vote played out as disaffected crowds continued tooccupy Wall Street, a square in Washington and parts of othercities around the country in protest of income inequality andrelated issues.

Obama advisers said they were working with Senate Democraticleaders on how and when to break out separate aspects of theoverall jobs bill for votes.

Even before Tuesday's defeat, the White House was casting theSenate vote as but the first act in what one Obama adviser called along-term play - essentially, an autumn full of action to forceCongress to take action on jobs. Senior Obama officials said it wasimportant for the Senate to act to keep pressure on theRepublican-led House.

Sen. Tom Coburn, R-Okla., was recuperating from surgery and didnot vote.

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