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Robert Reich

We need a bold jobs plan, but Obama shies away

History has shown that the US government needs to boost spending to rise out of a downturn. But with the 2012 election on the horizon, the White House hesitates to take the political risk.

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The President then called upon the nation’s political leadership to stop “drawing lines in the sand.” The lines were obviously Republicans’ insistence on cutting entitlements and enacting a balanced-budget amendment while refusing to raise taxes on the rich, and the Democrats’ insistence on tax increases on the rich while refusing to cut entitlements.

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These partisan “lines in the sand” are irrelevant to the current crisis. They’re not even relevant to the budget standoff now that Congress and the President have agreed to a process that postpones the next round of debt-ceiling chicken until after the election.

But that process itself will offer enough distraction over coming months to let the White House avoid coming up with a bold jobs plan – even if the nation succumbs to a double dip.

The drama continues this week and next as congressional leaders decide on their “super committee” of 12 lawmakers (six from each party). It then runs for another three months as the super committee decides on $1.2 trillion of proposed cuts, culminating in a tumultuous December when Congress votes on the package. Then we’ll have more drama if, as seems likely, Congress votes it down and the budget triggers go into effect – cutting sharply into defense and Medicare. But this stage won’t require any new decisions from Congress or the White House because the cuts happen automatically.

After that, we’re deep into campaign season and very possibly a double dip recession. Republicans will blame “big government” and the President and Democrats will blame Republican intransigence over the budget.

During yesterday’s pep talk, Obama restated his small-bore calls for extending a payroll tax cut that expires at the end of the year, extending unemployment insurance benefits, and creating an ill-defined “infrastructure bank” to create construction jobs. But these policy miniatures were added as a postscript to the debt talk, as if he felt obligated to mention jobs.

There’s still time for political operatives in the White House – and the person they work for – to change their minds. If economic stresses increase, Americans may insist on government doing more. A CNN poll released Monday found 60% believe the nation remains in an economic downturn and conditions are worsening. Only 36% believed that in April.

But for now the President is being badly advised. The magnitude of the current jobs and growth crisis demands a boldness and urgency that’s utterly lacking. As the President continues to wallow in the quagmire of long-term debt reduction, Congress is on summer recess and the rest of Washington is asleep.

The President should present a bold plan, summon lawmakers back to Washington to pass it, and, if they don’t, vow to fight for it right up through Election Day.

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