It surely doesn’t need a political expert to understand that “Jobs!” is the official ur-word for the US 2012 general election. With unemployment around 9%, it seems that almost every conversation in America – except where the participants are baying at the moon over the iniquities of the Federal Reserve Bank – ends up at unemployment. By J BROOKS SPECTOR.
Recent polls show only 26% of Americans agree with the president’s handling of the economy and more than a third say he has made economic matters worse. The problem is more taxing for the president because so many voters, especially those crucial independents, also say they want serious deficit reduction – something antithetical to more spending aimed at job growth.
The more left-wing Democrats in Congress, especially the House leadership, have been arguing for months that creating jobs (via stronger economic stimulation measures) is the key. Bringing down unemployment can also be a strategy for elected officials to preserve jobs, so advocating such measures is self-interest as well.
Liberal columnists and editorial writers have also been championing a more vigorous economic stimulus approach to position the Obama administration more effectively for the presidential race. Making jobs the core puts the election battle on familiar ground, but a problem, of course, is that the Obama administration’s record on jobs and growth has been spotty at best. Or, as a Texan like Rick Perry, might say: “All hat, no cows”.
To seize this opportunity, the Obama administration has just announced – actually, announced is the wrong word – what they’ve done is leaked a heads-up about an upcoming announcement that will be about a forthcoming speech. Three bites at the news cycle. Obama plans this speech for right after Labour Day, which this year comes on 5 September. Right after Labour Day is an American locution for, “Okay, everybody, back to work – even those of you in Congress. Summer’s over, the serious stuff begins again”.
Obama plans to call on Congress to agree to new stimulus spending, plus new tax cuts, to encourage job growth, in the face of populist pressure for government austerity. Reports say he will ask for tax cuts for companies that hire workers, appropriations for new road construction, as well as measures targeting the long-term unemployed. He may also propose mortgage bond relief that doesn’t need congressional action.
This package will come with further cuts in spending to reduce the federal budget deficit. Obama will push the pain of making these proposals on to the new congressional committee that is part of the debt-ceiling deal, beyond the $1.5 trillion it must already find. Putting the elements together, Obama will make the case that short-term spending can produce long-term deficit reduction by growing tax revenues from renewed economic growth. Or, as Obama said in Illinois, “We can’t afford to just do one or the other. We’ve got to do both. When Congress gets back in September, my basic argument to them is this: We should not have to choose between getting our fiscal house in order and jobs and growth.”
Republicans say they aren’t going to roll over nicely, however. In a memo to Republican colleagues, House of Representatives majority leader Eric Cantor wrote: “We must put an end to the policy uncertainty constantly being driven by this administration. That means stopping the discussions of new stimulus spending with money that we simply do not have.”
Many economists – including those usually supportive of the Republican Party – now agree that the best thing to do is boost the economy, including spending increases and tax cuts, with efforts to tame the national debt over the coming decade through spending cuts and tax increases when the economy is in better shape.
Influential commentators like Fareed Zakaria have weighed in to insist Obama take the fight to Congress. As he wrote just before word about the new Obama initiative surfaced: “Democrats are finally up for a fight — with President Obama. Having despaired that Obama gave in to the Tea Party on the debt deal, they now criticise him as too cautious in his proposals to boost American jobs. They’re right that Obama should present a sharp distinction to the public between his efforts and the Republican Party’s utter passivity in the face of a national employment crisis. But perhaps Obama realises that the most important factor that will help his re-election — and Democratic prospects more generally — is a rise in employment….”
Sounds like Obama was reading Zakaria’s mind.
With the US national debate about to become how best to generate new jobs and put the unemployed back to work, the presidential election campaign is about to swing back to familiar turf for Democrats. Whether they can win the argument in the public mind about what will work best, let alone with Congress, will determine whether Barack Obama will be packing to make way for president-elect Romney or Perry – or getting ready to settle into four more years in the White House. DM
"Go down this set of stairs and then just run - run as fast as you can." ~ Lt David Brink, 9/11