Obama jobs plan taking shape

WASHINGTON - The jobs package that President Obama plans to announce shortly after Labor Day could include tens of billions of dollars to renovate thousands of dilapidated public schools and a tax break to encourage businesses to hire workers, according to people familiar with White House deliberations.

As aides put together the proposal, they are also working out a companion plan to reduce federal budget deficits over the next decade, which Obama would share with the 12-member congressional "super committee" charged with finding long-term fixes for the growing national debt.

The deficit-reduction plan would rely on some of the ideas Obama worked on in private negotiations with House Speaker John A. Boehner (R., Ohio) during the summer, aides said. The officials spoke on condition of anonymity to discuss a proposal that is still taking shape.

The two-phase plan would require Obama to argue for spending more money in the short term while reducing the federal deficit over a longer period. Many economists support that combination, saying that cuts in spending should be delayed until the economy is stronger. Political strategists say it has been difficult to communicate that idea to voters.

Obama pushed the idea Wednesday during a stop in Alpha, Ill., his home state. "Yes, some of these things cost money," he said. "The way we pay for it is by doing more on deficit reduction."

Obama promised during his three-day bus tour of rural towns in the Midwest that he would present a jobs plan when Congress returns from its August hiatus. In doing so, he adopted a more combative tone than he generally showed during the debate this summer over raising the national debt limit. At every stop on the tour, the president issued a challenge to Republicans: Work on a bipartisan effort to expand U.S. employment or take the blame for blocking efforts to improve the economy.

"What is needed is action by Congress. It's time for the games to stop. It's time to put country first," he said in Cannon Falls, Minn. In Peosta, Iowa, after outlining measures he has already proposed, Obama said: "We could do even more if Congress is willing to get in the game."