Jobs crisis gets caught in strategy debate

Posted Aug. 21, 2011, at 10:39 p.m.

Wondering what the Obama administration is going to do about the jobs crisis? So, it seems, is everybody else. Even the Obama administration.

Recently The New York Times published an excellent account of a peculiar argument going on inside the White House. The political team, led by Chief of Staff Bill Daley and campaign Svengali David Plouffe, doesn’t want President Obama wasting his time or alienating swing voters by arguing for jobs bills Congress won’t pass. Better to work on deficit reduction, which they consider “an economic and political imperative.”

The economists, led by Gene Sperling, director of the National Economics Council, and pushed along by the public encouragement of such ex-Obama advisers as Lawrence Summers and Christina Romer, think the economy needs significant action on jobs and believe the debt-ceiling debate — which ended in the formation of a deficit-reduction “supercommittee” that punts the issue till late in the fall — has left room for a renewed push.

What’s curious about this argument is how inconsequential it is. If the political team wins, the jobs proposals that won’t pass will be somewhat smaller, and the president will talk somewhat more about deficit reduction. If the economic team wins, the jobs proposals will be somewhat larger, and the president will speak somewhat more angrily about Republican obstruction. My heart is with the economic team here, but my head says neither strategy will register in the unemployment rate. And I have trouble caring about strategies that won’t register in the unemployment rate.

Imagine this debate going on in a Republican White House, or even a Republican Congress. It’s laughable to imagine that Speaker John Boehner, R-Ohio, would start touring the country with his pro-jobs message, or scheduling more speeches lamenting Obama’s woeful inattention to a mounting human crisis. It’s even less plausible to suggest that his advisers would rein him back because Democrats and swing voters might get offended. This is the party that just voted to privatize and voucherize Medicare to leverage influence over the national debate over entitlements.

How would Republicans do this? Just look at how they’ve already done it. Over the past year, they have aggressively and effectively wrenched the conversation to something between deficit reduction, which they say they support because it’s popular but will stop supporting if it includes tax increases and spending cuts. And they haven’t relied on persuasion. It’s not been speeches or bus tours. Their position hasn’t even led in the polls. They have done it by identifying the leverage available to them and wielding it aggressively.

The debt-ceiling debate shows the force Republicans are willing to apply to achieve spending cuts, and that Democrats are not willing to apply to achieve action on jobs. The Republican position, which rejected tax increases on the rich — or anyone else — while demanding big cuts in education, Medicare and other programs, was unpopular. But the strategy, which refused to raise the debt ceiling until the administration agreed to spending cuts sans tax increases, was effective. And if the administration really believes that voters want “tangible results rather than speeches,” there‘s a lesson there.

If the White House was as committed to action on jobs as the GOP is to spending cuts, the debate would have ended differently. Ultimately, the debt ceiling was raised after the two parties agreed to form a supercommittee that would agree to a spending-cuts focused deficit-reduction package or set off a trigger that would automatically cut spending across the government. The genius of that compromise, at least if you’re a Republican, is that it changes the default in Congress from the usual “nothing happens” to “spending gets cuts.”

The White House had leverage it simply didn’t use. The Republican leadership knew the debt ceiling had to be increased. They knew they were hurting in the polls. Obama couldn’t have gotten them to renege on a core campaign promise like taxes, but what if he had simply said that he would not sign legislation creating a supercommittee for deficit reduction unless it was also required to pr oduce jobs proposals, and that the two had to pass as part of the same package? Modify the trigger a bit and you’re there.

Was there risk in such a strategy? Sure. Perhaps Republicans really would have refused to raise the debt ceiling. But there’s also risk in letting the labor market rust. If the voters want more than stunts and the White House wants more than talk, that’s the sort of play they’re going to have to run. They’re going to have to be as, or at least nearly as, intransigent and obsessive about supporting the faltering recovery as the Republicans are about imposing spending cuts.

Obama could rectify his mistake by announcing now that the worsening jobs picture requires the supercommittee to also produce jobs legislation, and that he simply won’t sign anything that comes out of that body if it won’t also help the recovery. If Republicans want to take him to the wall on that and risk the trigger because they don’t want to expand the payroll tax cut and invest in in frastructure, let them.

A second opportunity — though it feels strange to even call it that — will come when the two parties have to agree on legislation to fund the government through 2012. This is the same fight that almost led to a government shutdown in March. That time, Republicans threatened to let the government shut down unless the president signed a budget including spending cuts. This time, the president could threaten to let the government shut down unless Republicans agree to more help for the jobless, and for businesses.

Is this an optimal way to make policy? Of course not. It would be far better for the two parties to agree on a large package that includes short-term support for the economy and long-term deficit reduction. But this is the way policy is made these days. And unless the White House is willing to strap on some pads and play by the new rules, all the bus tours and all the speeches aren’t going to get them, or the unemployment rate, very far.

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