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Obama Job Plan: The Promise and the Drawbacks

Carl Bloice: The danger remains that those in the Administration’s camp who are never anything but political operatives will prevail, opportunity will give way to political expediency and fall prey to the notion that the 2012 election trumps all

More than once in the morning after the President’s jobs speech, I had the same conversation: “it’s more than I expected.” “It’s a far cry from enough.” “It doesn’t really matter because the Republicans will kill it.”

obama hugging baby

Official White House photograph: Pete Souza

Therein lay the quandary for progressives. Should we rally around a program that is deficient, or continue to press for more effective measures? My answer has been: both.

Unquestionably, passage of the American Jobs Act would be a good thing. As the President outlined it, the proposal aims to “to put more people back to work and more money in the pockets of those who are working,” and “create more jobs for construction workers, more jobs for teachers, more jobs for veterans, and more jobs for long-term unemployed.” To say that it doesn’t matter is to turn our backs on the millions of people out there struggling to maintain themselves and their families amid a faltering economy. “It’s not nearly as bold as the plan I’d want in an ideal world,” wrote economist Paul Krugman. “But if it actually became law, it would probably make a significant dent in unemployment.”

Will the jobs plan “provide a jolt to an economy that has stalled, and give companies confidence that if they invest and if they hire, there will be customers for their products and services”? Well, it’s hard to say. Every day, the economic crisis appears to get worse. The President says the economy has stalled. Some economists suggest it has stalled like an airplane that has lost engine power and is poised to begin another descent. Combine what is happening here at home with developments in Europe and you have the makings of this current crisis of capitalism turning really ugly.

At the moment, it seems to me, we should endeavor to put aside our policy wonk hats and concentrate on the politics of the situation. The battle lines are pretty clear: It’s the White House proposal, or doing nothing. There’s nothing else on the table. AFL-CIO President Richard Trumka holds out hope that the pot will be sweetened. “The plan announced by the president is only the opening bid,” he said. “We expect to see more proposals in the next weeks and months to put America back to work.”

We shall see.

The danger remains that those in the Administration’s camp who are never anything but political operatives will prevail, opportunity will give way to political expediency and fall prey to the notion that the 2012 election trumps all. That camp argues that all that matters is the vote of ill-defined “independents” and everything must be “bi-partisan” That notion should have been put to rest by the most recent Republican Presidential candidates debate. The GOP has no plan for job creation. The candidates presented a united front: the issue in the next election is “Obama.” They seem to have figured out that the public is more concerned with unemployment than deficit reduction, and if the jobs crisis is to be pinned on the President then surely nothing should be done to alleviate it over the next 13 months.

“Helping the country is unlikely to be enough of an incentive for Republicans to pass a bill, any bill, that Obama supports, even a bill, like this one, that is assembled mostly from refurbished spare parts collected from their own ideological warehouse,” wrote Hendrik Hertzberg in The New Yorker blog. “No doubt many of them sincerely believe that the end (upping the chances of defeating Obama and his nefarious agenda of turning America into a socialist hellhole like Western Europe) justifies the means (deepening the extent of mass unemployment, human suffering, and ancillary damage to the economy and to society).”

The Republican approach to tackling unemployment was well summed up by Sen. Bob Corker (R-Tenn.), who said the party was hoping the President would roll back regulations, take up entitlement reform, facilitate the production of more energy, and spur free-trade agreements.

Obama has already done too much regulation reform with his relaxation of air quality standards. Of course, the GOP wants to take a hatchet to Social Security, Medicare and Medicaid. More energy means mountain top strip mining, and dangerous shale oil pipelines, courtesy of the big oil companies. As far as trade pacts are concerned, Corker evidently wasn’t listening when Obama said, “ Now it’s time to clear the way for a series of trade agreements that would make it easier for American companies to sell their products in Panama, Colombia, and South Korea – while also helping the workers whose jobs have been affected by global competition. If Americans can buy Kias and Hyundais, I want to see folks in South Korea driving Fords and Chevys and Chryslers. I want to see more products sold around the world stamped with three proud words: ‘Made in America.’”

That’s another question. In the real world, such agreements are not the panacea they are touted to be; sometimes they have devastating effects on working people at both ends of the pacts.

Then, there was the out-to-lunch John Podhoretz writing in the New York Post that the President “did propose incentives to private-sector employers, but those incentives do not involve much in the way of lessening their regulatory or tax burden. Obama mentioned he had initiated a review of onerous federal regulations but had so far identified only 500 he could do away with.”

Only 500? (I cringe to think what they might be).

“And he spoke once again of making the wealthy pay more in taxes, which directly affects the ability of small-business owners to employ more people,” Podhoretz went on. Actually the two things have very little to do with each other. The Administration’s proposed hiring-tax incentives are intended for small business.

“The President has delivered a good start for putting Americans back to work that includes elements we as progressives have been calling for,” read a joint statement from Congressional Progressive Caucus co-chairs Reps. Raul M. Grijalva and Keith Ellison following the president’s speech. “Our country will finally make essential repairs to America’s roads and bridges. Wall Street and multi-millionaires will start to pay their fair share and support the country that has helped them prosper. The long-term unemployed, who have been hit hardest by the recession, will have the support they need while they find jobs.”

“For eight months, the Republicans have successfully paralyzed the national conversation by holding the people’s business hostage. They have shown no interest in putting the livelihoods of millions of working families ahead of their own narrow political goals. They have refused to take job creation seriously. As a result, we have seen record numbers of laid-off teachers, returning veterans struggling to find work, and firefighters and first responders hurting for funding.”

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“The crisis is so severe that we must do more than the president has proposed,” the Caucus leaders said September 9. “That’s why next week the Congressional Progressive Caucus will unveil our Framework to Rebuild the American Dream. It offers a bold, comprehensive progressive vision for America based on what we can do, not the Tea Party vision of what America can’t do. As we showed with the People’s Budget, we can create millions of jobs and eliminate the deficit within ten years if we choose the right priorities and make good decisions.”

“We join the President in calling on Congressional Republicans to put the national interest ahead of partisan stonewalling. We stand ready to move forward and put American families back to work.”

Back to the quandary.

A reoccurring theme in much of the media commentary on the Obama proposals has been futility, summed up by a Washington Post columnist’s declaration that “long before the speech, both sides had concluded it didn’t much matter: Obama has become too weak to enact anything big enough to do much good.”

“I thought it was a great speech,” the columnist quoted Rep. Steve Cohen (D-Tenn.) as saying. “But the odds of Obama getting his plan through Congress are probably as good as the Nationals winning the league this year.”

Liberal columnist, Harold Meyerson, called the President’s speech: “Good plan, good vision, good politics - That was an enlivened President Obama we saw earlier this evening - impassioned, indignant, non-professorial,” he wrote in the Washington Post. “And enlivened he should have been, because the American economy trembles on the brink of a double-dip recession, and the Republican opposition has been seized by an ideology that would erode what remains of the once-great American middle class. Not to mention, Obama’s own political future and that of his party are on the line as well.”

“The size and the substance of this new stimulus give Obama and his party the ability not only to rally many of his disenchanted core supporters but to reach out to voters in the middle of the political spectrum,” wrote Meyerson. “That’s partly because more than half the package - roughly $240 billion - takes the form of a one-year payroll tax reduction for employees and employers that will be difficult for Republicans to oppose. The tax credits for employees who hire veterans are also a political winner, though the tax credit for companies that hire the long-term unemployed (which in Republican-speak will mean minorities, whose votes they’re not going to get anyway) is one that the GOP is almost sure to resist. Also likely to meet a Republican rejection are Obama’s proposals to build roads and schools, and to fund the retention and rehiring of tens of thousands of teachers.”

Perhaps the most overused word this year has been “compromise” and we’re going to hear it a lot more over coming weeks. The danger here is that if the compromisers in the Administration – the ones too often anxious to split the difference with the opposition - hold sway, the Republicans and their “blue dog Democratic allies will get what their corporate backers want (the tax cut part) while the long-term jobless, the teachers, students and poor people are left out in the cold.

But wait. It gets worse. Those who want to take a knife to Social Security, Medicare and Medicaid are still lurking out there. And the President isn’t helping matters with his repeated ambiguous statements about “reforming” Medicare. He says this is necessary because of “an aging population and rising health care costs” Why not tackle the latter instead of taking from the elderly? Robert Borosage of the Campaign for America’s Future noted “the president went out of his way once more to put Medicare and Medicaid on the table for a grand bargain with Republicans for dramatic deficit reduction over the next decade. He promised to detail this in another presentation next week, threatening to once more deflate the debate we need over jobs with a return to a debate that is utterly divisive over deficit reduction.”

Then, there is another problem with the President’s plan. “Putting Americans back to work is also critical to keeping Social Security and Medicare strong,” says Max Richtman, president of the National Committee to Preserve Social Security and Medicare. “However, this proposal to extend and expand the payroll tax cut threatens Social Security’s independence by forcing the program to compete for limited federal dollars from general revenues, and by breaking the link between contributions and benefits. As we predicted back in December, ‘There’s no such thing as a temporary tax cut.’ Just months after being reassured that diverting contributions from Social Security would last for just one year, Congress is now being asked to extend and even increase this diversion of payroll taxes for another year. Doubling-down by also cutting employer contributions greatly worsens the situation, and makes it even harder to restore the Social Security system to self-financing. If this extension passes, there is no guarantee that Congress won’t be asked to extend it yet again, for a 3rd or even a 4th year or longer, and expand it even more, making it a de facto permanent part of the tax code. This is death by a thousand cuts.

“Social Security is paid for, earned by, and promised to American workers. We call on the President and the Congress to reaffirm the fact that Social Security has been, is, and will continue to be, a self-financed insurance program; and that this temporary payroll tax cut does not constitute a precedent that would undermine this principle.”

Ari Berman wisely asked in The Nation, “Could Obama’s to-be-determined deficit speech undermine the momentum from his jobs speech? Perhaps,” he continued, “The president left open the possibility for significant changes to Medicare and Medicaid, which won’t be popular with many Americans. The super-committee still has the power in Washington. Once its deadline nears, the conversation may once again revolve around deficits instead of jobs, especially since there’s no built-in incentive forcing the committee to focus on jobs, as compared to the triggered spending cuts.”

Labor leader Trumka Richard L. Trumka clearly senses the danger here. In the P.S. to his statement welcoming the President’s speech, he said. “Some politicians claim cuts to our social safety net, deregulation and lower taxes for the rich will fix our problems. But they’re flat wrong. If we continue down this road, it only will destroy more jobs and send us into a vicious downward spiral. Our country is too good and too rich to weaken our commitment to safety net protections such as Social Security, Medicare, Medicaid and unemployment insurance.

“We don’t have time to waste on the same old failed policies that drove our economy off a cliff in the first place. Tell Congress: Working families will judge our elected leaders by whether they act with integrity and energy to create good jobs now.”

“Progressives are demanding action on jobs,” wrote Borosage. “An inspired president on the stump is vital to making that case. His agenda is a first step, designed to attract bipartisan support. If Republicans oppose this, they will be turning their backs on working people, either out of misguided ideological extremism, or for partisan political advantage. The president is right. It is time to act.

“President Obama has taken a step in the right direction with his speech and jobs plan. It was a small step - but it has to be to present Republicans with the choice to cooperate or get pushed out of the way,” said Dave Johnson of the Campaign for America’s future. “If this passes it is a win for jobs and the economy - and therefore the President’s re-election. If Republicans block it, the President wins because voters will push Republicans out and the country will be able to get moving again. But it all depends on follow-through. The President has to keep out there, pounding on this, and only this, every single day until there is a vote. Every. Single. Day. That is the key."

Carl Bloice

Carl Bloice
The BlackCommenator