Why Obama and others are suddenly rolling out jobs plans
Whether it's Labor Day, the new elections season, or a reflection of Americans' priorities, everyone has a jobs proposal: from Obama and Boehner to Huntsman and Romney, the list goes on.
Presidential candidate Jon Huntsman just rolled out his agenda for creating US jobs. Mitt Romney is expected to do the same in coming days. And President Obama's deliberations over a new jobs plan – what to include and when to roll it out – have been in the news all week.
That's a lot of focus on jobs policy.
Oh, and the Chamber of Commerce and AFL-CIO are among the groups on the policymaking sidelines that are doing the same thing.
It's not like unemployment is a new problem that's just been discovered. The US jobless rate has been above 8 percent for 2-1/2 years.
But, although the health of the economy and state of the job market rank consistently as Americans' top concerns in polls, Washington's attention to the question of how to improve job creation has ebbed and flowed.
Several factors explain the recent resurgence, and most of them are not too difficult to guess:
• The election campaign for 2012 is ramping up. Candidates including the current occupant of the White House are feeling the strong incentive to focus on what matters to voters. The latter group includes lots of people without jobs, people who worry they could lose their job, and people who know their own finances would be helped by a stronger, job-growing economy.
• Labor Day is coming this weekend. It's an event that doesn't always factor into the nation's policy calculus. But with the weak economy, the holiday and the end of summer vacations provide a calendar prompt for job ideas to surface right around now.
• The economy is crying for help. Yes, unemployment has been a persistent problem for several years, but the sense of economic emergency arguably is higher now than at any time since the spring of 2009, when the Federal Reserve and Treasury were still wielding financial-crisis fire extinquishers. Economists in recent weeks shifted toward a heightened concern about the possibility of a new recession, and a flight to safety in financial markets has buoyed gold and US Treasury bonds. And this week a widely watched index of consumer confidence hit a two-year low.
• Jobs have cycled higher relative to other priorities. The flow of Washington imperatives since the financial crisis has sometimes seen jobs get eclipsed. In 2009 Mr. Obama pivoted for months toward health-care reform. This year Republicans have kept the spotlight on their goal of curbing federal spending and deficits. Having signed a Budget Control Act last month, based on a bipartisan deficit-reduction deal, Obama is eager to put the focus back on jobs.
If Obama can win Republican support for some policies that help the economy, that could help lift sagging approval ratings and bolster his reelection chances. If Republicans oppose his proposals, Obama can at least make that a campaign talking point, casting Republicans as obstructionists or obsessed soley with spending cuts.
For Republican rivals who hope to unseat Obama, unveiling policies aimed at employment gives them a chance to contrast themselves with what they argue has been a presidency of economic failures. Where Obama has emphasized efforts at temporary stimulus (a $787 billion Recovery Act, payroll-tax breaks, and more), Mr. Huntsman's plan, for example, focuses on a proposed permanent streamlining of the tax code and reducing regulatory burdens.
In fairness to Obama, he and other Democrats might embrace permanent tax reforms as well.
The procedural problem is that most Republicans (including Huntsman) want to do it on a "revenue-neutral" basis, while Democrats want to reap some extra tax revenue in what Obama calls a "balanced" effort to reduce future deficits. Also, the two sides differ on how much of the tax burden should be born by the richest Americans.
As long as neither party controls both Congress and the White House, new legislation on the issue is difficult.
And that leads to the big question: With all the current focus on job policies, will anything actually happen that makes a difference to the economy?
The possibility shouldn't be ruled out, but several hurdles would need to be overcome. The first is partisanship. Obama says he'll propose measures that can win bipartisan support, but it's unclear if Republicans will embrace his proposals. One week after Obama addresses both houses of Congress, House Speaker John Boehner is planning his own jobs speech.
Second, even if policies are enacted, they may be modest in scope, given that the two parties have agreed to a fiscal path that focuses on reducing deficits.
But some moves that could bolster long-term economic growth – such as tax reform – need not cost a lot of money, and could begin bearing fruit fairly quickly.