Obama’s Bold Jobs Bill (Maybe)

obama crowd

Photo: Pete Souza, White House

The President is sounding like a fighter these days. He even says he’ll be proposing a jobs bill in September – and if Republicans don’t go along he’ll fight for it through Election Day (or beyond).

That’s a start. But read the small print and all he’s talked about so far is extending the payroll tax cut and unemployment benefits (good, but small potatoes), ratifying the Columbia and South Korea free trade agreements (not necessarily a job-creating move), and creating an infrastructure bank.

An infrastructure bank might be helpful, depending on its size.

Which is the real question hovering over the entire putative jobs bill – its size.

Some of the President’s political advisors have been pushing for small-bore initiatives that they believe might have a chance of getting through the Republican just-say-no House. They also figure policy miniatures won’t give aspiring GOP candidates more ammunition to tar Obama as a big-government liberal.

But the President is sounding as if he’s rejected their advice.

That’s good policy and good politics.

Good policy because any jobs bill has to be big enough to give the economy the boost it needs to get out of the gravitational pull of the Great Recession.

Right now all the old booster rockets are gone. The original stimulus is over. The Fed’s “quantitative easing” is over.

Combine the budget cuts state and local governments continue to make with the slowdown in consumer spending, the reluctance of businesses to expand or hire, and the magnitude of unemployment and under-employment, and you need a big new booster rocket. I’d estimate the shortfall in aggregate demand to be $300 billion to $500 billion this year alone.

A bold jobs plan is also good politics. With more than 25 million Americans looking for full-time jobs, the wages of people with jobs falling, and an economy on the verge of a double dip, the President has to come out fighting on the side of average people.

Besides, Republicans won’t go along with any jobs initiative he proposes – even a tiny one. Better they reject one that could make a real difference than one that’s pitifully small and symbolic.

If Republicans reject it, Obama can build his 2012 campaign around that fight. Maybe he’ll even call Republicans on their big lie that smaller government leads to more jobs.

What would a bold jobs bill look like? Here are the ten components I’d recommend (apologies to those of you who have read some of these before):

  • Exempt first $20K of income from payroll taxes for two years. Make up shortfall by raising ceiling on income subject to payroll taxes.
  • Recreate the WPA and Civilian Conservation Corps to put long-term unemployed directly to work.
  • Create an infrastructure bank authorized to borrow $300 billion a year to repair and upgrade the nation’s roads, bridges, ports, airports, school buildings, and water and sewer systems.
  • Amend bankruptcy laws to allow distressed homeowners to declare bankruptcy on their primary residence, so they can reorganize their mortgage loans.
  • Allow distressed homeowners to sell a portion of their mortgages to the FHA, which would take a proportionate share of any upside gains when the homes are sold.
  • Provide tax incentive to employers who create net new jobs ($2,500 deduction for every net new job created).
  • Make low-interest loans to cash-starved states and cities, so they don’t have to lay off teachers, fire fighters, police officers, and reduce other critical public services.
  • Provide partial unemployment benefits to people who have lost part-time jobs.
  • Enlarge and expand the Earned Income Tax Credit – a wage subsidy for low-wage work.
  • Impose a “severance fee” on any large business that lays off an American worker and outsources the job abroad.

Some of these won’t cost the federal government money. Others will be costly in the short term but lead to faster growth.

Robert ReichRemember: Faster growth means a more manageable debt in the long term. Which means the President could tie this (or any other jobs bill of similar magnitude) to an even more ambitious long-term debt-reduction plan than he’s already proposed.

A bold jobs bill is good politics and good policy. Let’s wait to see what the President actually proposes.

Robert Reich
Robert Reich’s Blog

Related Posts Plugin for WordPress, Blogger...

Comments

  1. ron says

    You keep promoting the Nobel Peace Prize winner who has how many wars going? Now he wants a free trade agreement with Columbia and South Korea. His jobs czar has just moved more jobs (GE) to China. Oh, and GE made billions and didn’t pay any taxes.
    You’re right. This IS change we can believe in.

  2. prayforjustice says

    We need to start looking for a democrate that will stand up for us not give in to all the Republicans. Why is Obama selling us out either that or he can grow a backbone and fight for the US and not just be sitting there compromising our lives away!!!!!!!

  3. says

    While your recommendations are excellent, they are measures that the New Majority of 2009 and the “Change We Can Believe In” President should have implemented before 2010. As of now, after most have gone through each phase of “A Lexicon of Disappointment” ( http://www.naomiklein.org/articles/2009/04/lexicon-disappointment ), all that remains is a “bold jobs plan” as “good politics” on the campaign trail — but no chance of it ever actually being “policy.”

    From “Now Obama Must Lead” ( http://www.laprogressive.com/progressive-issues/now-obama-must-lead/ ): “Now that there is a new campaign season, this one for reelection, the same PR onslaught of 2008 will begin again — with all the rehashed FDR/Hope/Change/Jobs Programs pile of #*#*.”

  4. says

    Reich has the CORRECT ideas – yet again – on what a REAL Democratic president must do.

    But he has the WRONG idea on what WE MUST NOW WORK FOR. He concludes: “Let’s wait to see what the President actually proposes.”

    We don’t have motive – and we may not have time – to wait. This president has already shown that he somehow can’t manage to act as if he believes with whole heart and might in anything like a reasonable Democratic agenda. AT MOST he will respond to action and pressure, not merely good advice.

    For right now we must support the 350.org Keystone pipeline civil disobedience campaign. If Obama really intends ever to lead for a sustainable economy, this is a defining issue.

    And the sooner we get a credible primary challenge to Obama, the better for ourselves, the country, the party, and even for the possibility that Obama’s actions and policies will improve and make sense and begin to merit him consideration for re-election.

Leave a Reply

Your email address will not be published. Required fields are marked *