Plus: Trade Gap Narrows in July and Patent Overhaul Legislation Clears Congress.

Obama Proposes $447 Billion Jobs Plan
President Obama last week called on the United States Congress to pass the American Jobs Act, a $447 billion package of tax cuts and new government spending designed to revive the stalling economy.

“There should be nothing controversial about this piece of legislation,” the president said. “Everything in here is the kind of proposal that’s been supported by both Democrats and Republicans… . And everything in this bill will be paid for. Everything.”

The package is “weighted toward tax cuts, which account for more than half the dollar value of the plan,” Bloomberg News reports. “The rest would provide money for improving infrastructure, modernizing schools and aid for states to keep teachers and emergency workers on the job.”

According to the New York Times, “much of the money would flow into the economic bloodstream in 2012. The pace would be similar to that of the $787 billion stimulus package passed in 2009, which was spread over more than two years.”

Job growth stalled last month and the unemployment rate has hovered at or above 9 percent for more than two years. In the latest week reported, the week ending September 3, new U.S. jobless claims rose to 414,000 from 412,000, the U.S. Department of Labor said Thursday.

“Obama never estimated how many jobs would be created by his plan, which also includes new federal spending for construction, hiring and an extension of jobless benefits for the long-term unemployed,” the Associated Press explains. “Despite his promise that it would all be paid for, he has not yet released the details on how.”

“Economists estimate that President Obama’s plan, costing an estimated $447 billion if it were ever fully adopted, could create anywhere from 500,000 to nearly two million jobs next year,” according to a separate Times report. “Most of those jobs would be added, economists say, as workers spend the additional take-home pay that would result from a proposed payroll tax cut for employees. As consumers increase spending, that can prompt more hiring by retailers, washing machine makers, restaurants and more.”

Trade Deficit Shrinks in July
The U.S. trade deficit narrowed to $44.8 billion in July, a 13.1 percent decrease from the revised $51.6 billion gap in June, according to the U.S. Department of Commerce on Thursday. The improvement was largely due to stronger demand for U.S. goods. July exports rose $6.2 billion to $178 billion, while imports shrank $0.5 billion to $222.8 billion.

In July, the goods deficit dropped to $60.6 billion, down $6.4 billion from June, while the services surplus climbed $0.4 billion to $15.8 billion. Goods exports rose $5.7 billion to $126.9 billion, led by industrial supplies and materials, capital goods and automotive vehicles, parts and engines. Meanwhile, goods imports fell $0.7 billion to $187.5 billion, due to declines in industrial supplies and materials and foods, feeds and beverages.

“A narrowing trade deficit adds to economic growth. It signals that more products are being made in the United States and less money is flowing overseas,” the Associated Press explains. “The U.S. trade deficit through July was running at an annual rate of $565.3 billion, 13.1 percent higher than last year’s imbalance of $500 billion.”

Oil prices also played a major role in narrowing the trade gap for July, as prices fell from $106 per barrel in June to $104.27 per barrel in July, according to the MarketWatch. Americans also decreased their consumption of imported energy products by 4 percent for the month.

Senate Passes Patent Overhaul
The U.S. Senate last week passed legislation to overhaul federal patent laws for the first time in almost 60 years, fundamentally changing how inventors and companies receive patents.

The legislation is designed to align the U.S. patent system more closely with patent systems in other major countries, altering the law so a patent for an innovation would be granted to the first inventor to file an application for it, rather than to the creator of the innovation.

The new bill also features a new funding system for the U.S. Patent and Trademark Office, allowing the entity to keep the money it makes from inventors’ filing fees. The bill also institutes new rules that allow third-parties to challenge patents after they are awarded and sets up a grace period for allowing inventors to file applications after publicly disclosing their innovation.

The key changes are expected to help the U.S. patent office clear a growing backlog of applications.

“Advocates have been pushing for years for this overhaul, and even the bill’s critics support parts of the legislation that will generate funding for the patent office,” CNN Money says. However, “some small businesses and inventors opposed the change, saying individual inventors will be disadvantaged because they don’t have an in-house legal department or an army of patent attorneys on retainer,” the Wall Street Journal notes (subscription required).

The legislation, which passed by a vote of 89-9 on Thursday, now heads to President Obama, who is expected to sign it into law.

“Intellectual property is the lifeblood of manufacturing, and it is absolutely essential that manufacturers have the necessary protections for their inventions to encourage jobs and economic growth,” the National Association of Manufacturers said in a statement. “Over the decades, manufacturing has evolved and modernized. Now it’s time to update the system to keep up with manufacturers. We urge swift passage in the Senate and look forward to the President signing the bill as soon as possible.”