Jobs: new priority at the White House
Bowing to congressional pressure for legislation to ease unemployment, President Reagan Tuesday endorsed a bipartisan plan for a 5-cent-a-gallon increase in the gasoline tax to finance repair of the nation's roads and bridges.Skip to next paragraph
Subscribe Today to the Monitor
While trying to keep his distance from anything akin to a make-work program, Mr. Reagan nevertheless said he has decided ''we should move forward'' with the program which would create 300,000 jobs.
But in a bid to head off any more aggressive job-creating action by Congress, the administration is preparing its own proposal to reduce the 10.4 percent jobless rate by channeling unemployment-compensation funds through corporate employers. It is one of a ''series of other measures which would give our economy a fresh boost as we move into '83.''
Under this plan, suggested by Treasury Secretary Donald Regan Tuesday, a company hiring an unemployed worker would receive a voucher for the amount of his remaining jobless benefits. Thus the company would be able to reduce its cost of hiring a worker, presumably encouraging it to boost its roll of employees. In part, the effect would be to reduce the $3.35 minimum wage for participating companies.
''We have to attack (high unemployment) for humanitarian reasons,'' Mr. Regan said. He noted the unemployment compensation proposal has not been approved by the President and won't be offered until the new Congress convenes in January.
Even though the proposal is designed to reduce exceptionally high unemployment among teen-agers and those who worked in factories that have closed , organized labor opposes the plan. ''It is corporate welfarism. It is an attempt to have the federal government take on part of the payroll,'' says AFL-CIO official Rex Hardesty.
Labor does support the agreement reached this week by House Speaker Thomas P. O'Neill Jr. and Senate majority leader Howard H. Baker Jr. and given the nod by Reagan Tuesday. The proposed gasoline tax would support a $5.5 billion highway repair plan to create 300,000 jobs. Reagan said the plan is ''not a jobs bill as such,'' but there will ''obviously be some employment with it.''
Administration officials still are arguing that speeding up the tax cut due in July would do more for the economy. But the two congressional leaders say that idea has very little chance of favorable action. Senator Baker said he had ''serious doubt'' it could pass the Republican-controlled Senate.
Both the congressional jobs plan and the President's tax-cut speedup are aimed at hastening economic recovery and putting Americans back to work. The recession ''is taking much longer to overcome'' than the administration had supposed, Regan admitted. He said the administration now expects real economic growth in 1983 to be in the range of 3.0 to 3.5 percent, less than is needed to make a major reduction in the unemployment rolls.
Private economists support that relatively pessimistic economic outlook for next year. A survey released earlier this week of the National Association of Business Economists said that after adjustment for inflation, the economy will grow at a 3.3 percent rate during 1983, and unemployment will be about 9.2 percent by the end of 1983.
In the face of sluggish economic growth, inflation has remained at a relatively modest level. During October, the consumer price index rose 0.5 percent - a 4.1 percent annual rate - versus a 0.2 percent climb in September. October's increase was fueled by rising rents and fuel costs.
While admitting that speeding the tax cut would boost the fiscal 1983 deficit by about $10 billion, Regan contended it would lower the 1984 deficit by triggering faster growth. ''Our plan should help the economy sooner than public works programs,'' he said. And a highway repair plan uses skilled labor, ''not the hard core unemployed who haven't had a job in 26 weeks.