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
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
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
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.
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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
1. Exempt first $20K of income from payroll taxes for two years. Make
up shortfall by raising ceiling on income subject to payroll taxes.
2. Recreate the WPA and Civilian Conservation Corps to put long-term unemployed directly to work.