Maybe President Obama’s jobs plan will succeed in making congressional Republicans look bad before the 2012 election, especially if they reject it and demonize it as another socialist plot.
But even in the unlikely event that the congressional Republicans pass it whole, would the president’s $440 billion grab bag offer significant solutions to Main Street’s most pressing problems – reducing the unemployment rate and halting the foreclosure crisis?
It’s true that the president and his administration did not dig the deep economic hole the country is in. And the president deserves some credit for stepping out of Washington’s deficit obsession bubble just long enough to recognize that nothing the government has done so far has been enough to lift those outside Wall Street out of that hole – the worst economic downturn since the Great Depression.
But throughout his administration, and again last night, he has not offered big enough shovels, to dig us out of it.
As Paul Krugman [who labels the plan “a lot better than nothing”] points out, the collapse of the housing bubble blew a $1 trillion a year hole in the economy, a hole that last night’s jobs plan won’t come close to filling.
But a comparison of the jobs plan’s $440 billion price tag with the unsuccessful $16 trillion bank bailout suggests its relative timidity. Remember that the federal government handed over that money to the bankers with no strings attached and no questions asked.
While the administration likes to tout the bank bailout’s success by bragging that most of the money has been repaid, by its most important measure – ensuring that the banking system helped restore the Main Street economy – it remains a costly failure.
Still you have to at least acknowledge that the bank bailout was a bold scheme. The same can’t be said for the American Jobs Act, which as the president stressed, was a collection of non-controversial proposals that even corporate Republicans have endorsed in the past.
Call it Obama’s “bold lite.”
Yes, it was bolder than what the president has suggested since the original $700 billion stimulus. It includes $240 billion of tax cuts and about $200 billion in infrastructure spending and aid to local governments, along with regulatory review, a vague housing scheme, plus a significant new round of budget cuts to pay for it, including unspecified threats to Medicare.
According to an estimate by Economic Policy Institute, the new plan, if passed whole, would create 2.6 million new jobs over the next several years and prevent the loss of another 1.6 million jobs.
That’s not chopped liver – but the country is still staggering under the weight of persistent 9 percent unemployment, with 14 million Americans unemployed, another 8.8 million working part-time but seeking fulltime work, and another 2.6 million who don’t show up in unemployment numbers because they’ve given up looking for work. In addition, we face a continuing foreclosure crisis and the threat of future budget cuts.
While I hope that the congressional Republicans don’t just decide to block the proposal, experience suggests that they are stuck on that strategy as a way to undermine the president. Will “a lot better than nothing” be good enough to help millions of Americans for whom the recovery has only been a mirage? Or is the president setting himself up, and the rest of us, for another round of dashed hopes and failure?