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Obama, Democrats 'Pivot' To Jobs But May Be Hamstrung

Ed Andrieski

What Washington was worried about and what many Americans have been haunted by has seemed out of synch in recent weeks.

The fiery Washington debate was about the debt-ceiling, while the concerns of millions of Americans was about jobs, either finding or keeping one.

For Washington Democrats, the debt ceiling debate was a distraction from the jobs message they view as key to their re-election efforts.


The enactment of a debt-ceiling law to avoid a default by the U.S. government allowed them to return to the topic Americans tell pollsters they are most concerned about.

Washington Republicans, for their part, tried to make their insistence that deficits be reduced without tax increases relevant to the epidemic of job anxiety, too. Higher taxes would kill jobs or prove a disincentive to job creators, they argued.

Thus, Republicans could contend that the last few weeks of debt-ceiling chicken wasn't a distraction from the urgent jobs debate, but central too it. Voters will decide in 2012 if that argument is persuasive.

But for Democrats, again, the debt-ceiling debate was all a sideshow. Which is why they have been so keen to quickly "pivot" to refocusing on jobs.


For instance, Wednesday morning, White House officials informed reporters that President Obama would make a Midwest bus tour the week of Aug. 15 to discuss jobs and the economy.

Meanwhile, Rep. Nancy Pelosi (D-CA), the House minority leader, nearly wore out the word "jobs" at a news conference on Tuesday:

Yesterday, we crossed a bridge: Enough talk about the debt; we
have to talk about jobs...

... Every time I've met with you, we've started our session with how many days it has been since the Republicans have been in office. Well, today it's 210, and we haven't seen any legislation yet that has
created jobs. In fact, we've seen legislation which has cost nearly 2
million jobs. More than 9,000 jobs a day would be lost of the
Republicans' legislation were signed into law.

We see, in addition to that, a holdup on the infrastructure bill
and on FAA, which we're hoping will be resolved today. You'll be
hearing more about that from my colleagues.

Jobs, jobs, jobs, jobs, jobs — you cannot say it enough.

Actually, you can but that's beside the point.

Among the items on President Obama's jobs agenda is an infrastructure bank that would help finance large construction projects. Patent reform and free trade agreements are also on his list. House Democrats on Tuesday talked about the creation of a national manufacturing strategy and currency reform.

But here's the rub. The Democratic may pivot only to find themselves facing a wall. Because of the debt-ceiling deal, the prospects for any job-creation approach requiring significant new additional federal spending aren't high. Democrats may be mostly powerless to do much on the jobs front.

Many economists have warned that the deficit cuts will actually do more harm than good in terms of job growth. With consumers reluctant or unable to spend enough to juice the economy, the government was the spender of last resort.

So reducing government spending when a feeble economy can least afford it isn't likely to do much for creating or conserving jobs.

Robert Reich, the former Clinton Administration Labor Secretary, wrote of challenge facing Obama:

He says he wants to extend tax cuts for middle class families and make sure the jobless get unemployment benefits.

Fine, but the new deal won't let him. He'll have to go back to Congress after the recess (five weeks from now) and round up enough votes to override the budget caps that now restrict spending. What are the odds? Maybe a little higher than zero.

He says he wants an "infrastructure bank" that would borrow money from private capital markets to pay private contractors to rebuild our nations roads, bridges, airports, and everything else that's falling apart.

Fine, but the new deal he just signed may not let him do this either – if the infrastructure bank relies on federal funds or even federal loan guarantees to attract private money. The only way he could create an infrastructure bank without sweetening the pot would be by privatizing all the new infrastructure. That means toll roads and toll bridges, user-fee airports, and entry fees everywhere else.

Ezra Klein at the Washington Post made a similar point:

The White House is promising that the end of the debt debate will mark a "pivot" towards jobs. In a Washington Post op-ed today, Treasury Secretary Timothy Geithner previewed that message, arguing that "It is not enough for Congress to have prevented a disaster it brought on itself. Lawmakers should return in September prepared to act to strengthen the economy and get more Americans back to work."

But few expect serious action from Congress. Geithner brings up the payroll tax cut, extending unemployment benefits and financing a massive investment in infrastructure. But note that the first two aren't new stimulus: they're simply a continuation of current policies. If the administration wins those fights, it will have simply succeeded in doing no harm. And though infrastructure is a no-brainer, it's also not likely to happen unless Democrats can find some way to pay for it that Republicans support.

With the Labor Department widely expected to deliver another disappointing jobs report Friday, the thought that the pivot may, in the end, not lead to a solution to the nation's unemployment crisis is just one more reason for anxiety.

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