Obama proposes $50 billion spend to create jobs; $200 billion tax cuts part of Obama's plan; Gillard wins in Australia with the slimmest of margins; Myanmar's military leader visits China; Iran not participating with nuclear inspections; Afghanistan freezes assets of borrowers at Kabul Bank; and more
In an effort to spur job creation during a lackluster economic recovery, U.S. President Barack Obama proposed a six-year, $50 billion plan (Reuters) to rebuild infrastructure and cut taxes on business. Obama is facing pressure to lower the 9.6 percent unemployment rate ahead of congressional elections on November 2. Obama plans to cut business taxes by $200 billion over two years to encourage businesses to invest in plants and equipment despite the sagging recovery. He will also announce a $100 billion proposal to increase and permanently extend a tax credit for business research development. Economists question whether these actions would stimulate the economy quickly enough, while some Republicans argue the government doesn't need more stimulus spending given its high debt levels. Polls show voters are concerned about Obama's failure to focus on unemployment, but they also indicate a lack of confidence in the efficacy of new spending (FT). A higher priority for some congressional Republicans is extending the Bush income-tax cuts (WSJ) for higher earners set to expire at the end of 2010, which Obama and many congressional Democrats want to let expire.
In the New York Times, Peter Orszag says, "The best approach is compromise: Extend the tax cuts for two years and then end them altogether." Getting a deal in Congress "may require keeping the high-income tax cuts," he says, "and that would still be worth it."
On the Weekly Standard's blog, Irwin Stelzer says the economy "is not about to descend into the double-dip predicted by pessimists." Despite voters' and politicians' focus on unemployment, economists see underlying conditions that will eventually spur job growth.
On Bloomberg, Kevin Hassett says unemployment is high because wages are too high, due in part to federal and state minimum-wage laws and rigid union contracts.
PACIFIC RIM: Australia's Labor Party Wins Narrow Rule
Australian Prime Minister Julia Gillard and her Labor government narrowly secured a second term in parliament (SydneyMorningHerald) with the backing of two remaining independents after seventeen days of protracted negotiations.
China: Myanmar's military leader Than Shwe, whose regime has been criticized for its human rights record, arrived in China (al-Jazeera) for a four-day visit after China hailed the country as a "friendly neighbor" and warned against interference in its upcoming election.
This is an excerpt of the CFR.org Daily News Brief. The full version is available on CFR.org