Obama Promises a Plan…Again
“I’ll be putting forward…a very specific plan to boost the economy, to create jobs and to control our deficit.”
Remember all the times over the past two and a half years we’ve heard him say he’s going to “pivot” to jobs?
Remember when the President gave a speech in April about a phantom budget do-over?
Based on precedent, it’s highly unlikely that there will be “specific” plans to boost the economy. Most likely, the proposal will include the same four things he’s been saying for the past few months: payroll tax holiday extension, unemployment benefits extension, free trade agreements, and this “infrastructure bank.”
The President is trying to use the payroll tax holiday to box in Republicans. He will say not extending it amounts to a tax increase because it takes money out of people’s pocket, which is needed to stimulate the economy. (Anyone else see the irony here?) It puts such a small amount in people’s pockets each month (and in fact puts less money in the pockets of the poorest Americans than before the holiday), that it does nothing to actually stimulate spending and grow the economy.
Prolonged unemployment benefits moves beyond “insurance” and amounts to welfare: giving more money to people than they paid into the system. Currently Americans can receive up to 99 weeks of unemployment benefits. That’s 99 weeks they have to find a job. At some point the threat of having to find a job to take care of themselves has to be a motivating factor. Extended unemployment leads to less vigorous job searching. They also do not stimulate the economy nor do they create jobs.
Free Trade Agreements would be a great way to create jobs and stimulate the economy. However, the President wants Congress to also pass an extension of Trade Adjustment Assistance, which gives even more generous jobless benefits to those who lose their job because of international trade. However, the program is not effective, it is overly costly, and only helps a very small percentage of unemployed workers. The President won’t release the free trade agreements until he gets that extension of spending. So despite his claims, it is he who is holding up thousands, perhaps hundreds of thousands of jobs, in order to provide overly generous benefits to a tiny percentage of unemployed workers.
This “infrastructure bank” is basically a union kickback and a clever way to hide additional stimulus spending without it showing up on the federal ledger. It won’t spur job growth or even create lasting jobs. The idea of this “bank” is basically a new government entity which gives loans – more likely grants or subsidies – to companies which plan to rebuild the nation’s infrastructure. Remember all that stimulus spending that was mostly for construction jobs? Where are those construction jobs now? Gone, and we had to spend a couple hundred thousand dollars for each of those temporary jobs.
Those have been his proposals for the past couple months. However, as we’ve seen before, he either won’t submit a plan, or his plan will be so vague that the Congressional Budget Office won’t be able to score it.
Meanwhile, proposals which could stimulate economic growth are chastised. Such as tax reform – closing loopholes, ending subsidies but lowering rates to make businesses more competitive. Also reforming the regulatory process. Removing much of the crushing burden from businesses that Dodd-Frank created and have been piled on for decades would make businesses more efficient and free up capital to hire more workers. Opening up domestic energy production could create hundreds of thousands of jobs, both in the building of the infrastructure needed to produce that energy and the workers needed to release the energy. These things don’t take government spending to enact, they just take Congress to act.
President Obama has a “plan,” which may or may not ever emerge. We could create lasting jobs from the free trade agreements (if he sends them to Congress) and if those are passed along with conservative plans, then without spending additional money, millions of jobs could be created. Those are the kinds of ideas that Americans want right now.