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Democrats Fear Obama’s Jobs Plan Will Be Too Little, Too Late

Forty-eight hours from now we’ll be pouring through the details of the President’s jobs speech, such as it is, but it doesn’t sound like his fellow Democrats are very optimistic:

President Obama’s new effort to revive the ailing economy may be too little, too late, according to Democrats and liberal policy experts.

They contend that Obama missed his chance to turn the economy around by November 2012, but still want him to call on Congress to move an aggressive new jobs plan — even if it has little chance of passing.

Obama should swing for the fences during his speech on Thursday, they say, claiming there is no need to be politically pragmatic with the House in GOP hands.

“The president has to bring forward a bold proposal. He can’t start the process by negotiating with himself,” said Sen. Bernie Sanders (I-Vt.), who caucuses with Senate Democrats. “He needs to say, ‘If we do A, B and C, we can create millions of new jobs,’ and take it to the American people.”

The risk for Obama, however, is that he could appear weak by putting forth a jobs proposal that is immediately viewed as dead on arrival on Capitol Hill.

Liberal activists say the best chances for passing legislation that would have really spurred growth was in the last Congress, when Democrats controlled the House and as many as 60 seats in the Senate.

Obama successfully pushed a stimulus bill through the 111th Congress, but it attracted only a few votes from Republicans and was criticized by liberals as too small. The White House vowed it would keep unemployment rates at around 8 percent. Now, the nation’s unemployment rate stands at 9.1 percent.

Dean Baker, co-director of the Center for Economic and Policy Research, said Obama made a mistake by not pushing for more stimulus when Democrats had the votes in 2009 and 2010.

“He should have said, ‘This is a great first start, but we’re going to need more,'” Baker said.

What this analysis ignores, of course, is the fact that, almost immediately after the 2009 stimulus bill passed Congress, the grounds of the debate were starting to shift. The first Tea Party protests, inspired at least in part by a classic rant from CNBC’s Rick Santelli that ended up going viral, took place on on April 15th of that year and attracted large crowds in cities like Altanta, Georgia. Follow-up protests in the coming months would become energized when Congress took up a health care reform plan that became more controversial the longer it was pending on the House and Senate floors. That summer would see the famous Congressional Town Halls, which many took as a sign that the public, far from being placated by an election only a few months earlier was still angry, still upset at an economy that seemed in permanent decline, and once again, and perhaps not soon enough, fed up with Washington.

Even with the Democratic majorities in the House and Senate, it’s difficult to see how another stimulus package could have passed during that twelve month period from January 2009 to January 2010. The public outcry would’ve been loud, and there would have been pressure on Blue Dog Democrats in the House and fiscal hawk Democrats in the Senate to resist the pressure to spend more money. It only would’ve taken one Democrat in the Senate to flip and given the people whose jobs were on the line in 2010 and 2012 (Blanche Lincoln, Ben Nelson, Kent Conrad, and Evan Bayh (who wouldn’t go on to announce his retirement until 2010) come to mind) it’s not inconceivable that more than one would’ve bowed to the pressure of constituents who didn’t want to spend any more money.

And there was no way a stimulus package was going to pass in 2010, after Scott Brown’s election, unless it included significant tax cuts. So, the argument that the President should’ve gone for more stimulus ignores political reality in the extreme. Perhaps he should have, but it likely would’ve required back pedaling on health care reform in exchange, and that would’ve really upset the Democratic base.

As for the rest of the advice, it doesn’t look like the President will be going bold at all:

The economy weak and the public seething, President Barack Obama is expected to propose $300 billion in tax cuts and federal spending Thursday night to get Americans working again. Republicans offered Tuesday to compromise with him on jobs – but also assailed his plans in advance of his prime-time speech.

(…)

According to people familiar with the White House deliberations, two of the biggest measures in the president’s proposals for 2012 are expected to be a one-year extension of a payroll tax cut for workers and an extension of expiring jobless benefits. Together those two would total about $170 billion.

The people spoke on the condition of anonymity because the plan was still being finalized and some proposals could still be subject to change.

The White House is also considering a tax credit for businesses that hire the unemployed. That could cost about $30 billion. Obama has also called for public works projects, such as school construction. Advocates of that plan have called for spending of $50 billion, but the White House proposal is expected to be smaller.

Obama also is expected to continue for one year a tax break for businesses that allows them to deduct the full value of new equipment. The president and Congress negotiated that provision into law for 2011 last December.

Though Obama has said he intends to propose long-term deficit reduction measures to cover the up-front costs of his jobs plan, White House spokesman Jay Carney said Obama would not lay out a wholesale deficit reduction plan in his speech.

So much of this seems like just a repeat of what we’ve seen before. We had infrastructure spending in the 2009 stimulus bill, and instead of spurring significant expansion and new hiring, it simply resulted in localities hiring the same contractors they usually do, most of whom completed the tasks with existing labor rather than taking on new employees. That bill encompassed hundreds of billions in spending and did nothing, and additional $50 billion is a drop in a bucket. The hiring tax credit is likely only to subsidize employers who are planning to hire already. If this is all the President is going to put forward on Thursday, then he’s built up a lot of anticipation for a plan that isn’t really worth more than a press release. And that could be a problem for him and his party.

No wonder Democrats are worried.
 

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About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May, 2010 and also writes at Below The Beltway. Follow Doug on Twitter | Facebook

Comments

  1. Hey Norm says:

    “…That bill encompassed hundreds of billions in spending and did nothing…”

    Um…that’s a factual error. If it did nothing then why did growth grind to halt as the stimulus money ran out? The facts aren’t lining up with your ideology.

    Like or Dislike: Thumb up 7 Thumb down 0

  2. john personna says:

    We had infrastructure spending in the 2009 stimulus bill, and instead of spurring significant expansion and new hiring, it simply resulted in localities hiring the same contractors they usually do, most of whom completed the tasks with existing labor rather than taking on new employees.

    And if government hadn’t hired, those firms would have kept idle employees because … ?

    Seriously, dude, economists agree that the end of the stimulus cycle puts downward pressure on employment. Your example shows why. As localities run low on funds, and stimulus dries up, who exactly pays for those projects and those workers?

    Like or Dislike: Thumb up 7 Thumb down 1

  3. bandit says:

    More money for ‘shovel ready’ projects that don’t exist and handouts to the teachers unions. He’ll have to go back to blaming someone else.

    Like or Dislike: Thumb up 1 Thumb down 3

  4. Tano says:

    instead of spurring significant expansion and new hiring, it simply resulted in localities hiring the same contractors they usually do, most of whom completed the tasks with existing labor rather than taking on new employees.

    Which tells you what?

    C’mon Doug – this is pretty obvious. The stimulus spending prevented perhaps millions of more people from losing their jobs, in the very process you outline. If you look more carefully, it actually did create a fair number of jobs. But your complaint here is screaming an obvious truth in your ear – the stimulus was not large enough. It stopped the bleeding, and created a modest number of jobs but was not big enough to fully deal with the scope of the problem.
    Are you deaf?

    Thank you GOP. Thank you libertarians. Thank you Doug.

    Like or Dislike: Thumb up 5 Thumb down 1

  5. @Tano:

    Ah yes, falling back on the whole phony “saved jobs” mantra. Nice try, nice try.

    Like or Dislike: Thumb up 2 Thumb down 11

  6. Hey Norm says:

    Saved jobs are “phony”?
    WTF??? Tell that to someone who kept their job while friends and family lost theirs.

    What Doug’s political ideology prevents him from discussing is that the stimulus was designed for a contraction that was around 60% of the actual size of the Bush contraction. Sort of like plugging a hole with half a cork.

    Like or Dislike: Thumb up 4 Thumb down 1

  7. Breschau says:

    It’s a pretty simple concept, Doug. Just answer this one question:

    What would have happened to the people working for those “same contractors” if the stimulus money had not been available?

    Like or Dislike: Thumb up 5 Thumb down 1

  8. john personna says:

    @Hey Norm:

    You gotta remember, the GOP is the “no math” party.

    Like or Dislike: Thumb up 3 Thumb down 1

  9. SteveP says:

    Government spending consumes wealth. The only thing that will turn things around is wealth creation. That can only be accomplished by removing the shackles from the private sector.

    Like or Dislike: Thumb up 2 Thumb down 7

  10. john personna says:

    @SteveP:

    Government spending consumes wealth.

    I understand that this is one of those talk-radio slogans, and one which is easy to accept on the surface, but I encourage you to look deeper.

    Sometimes government spending really is “investment.” That isn’t to say that it always is, or that spending should be indiscriminate. It just means that we should look at it, program by program, or project by project..

    The classic anti-example is free public education. True, it costs money. But on the other hand it does produce a literate workforce. And it is true that a literate workforce generates more prosperity for a nation in the next iteration.

    Or we could look at the interstate highway system. It had a cost, but I think we are pretty sure that a dazzling array of businesses were created around it. It would be ironic, for instance, if the guy with “The World’s Largest Tomahawk” wanted government out of his business.

    Like or Dislike: Thumb up 4 Thumb down 1

  11. anjin-san says:

    Government spending consumes wealth.

    Yep, the new tunnel that is being built with stimulus money that will save 250K commuters about 20-30 minutes a day where I live is a wealth consumer. No upside there. And the new bridge replacing one that is about to fall down? Total black hole.

    Like or Dislike: Thumb up 4 Thumb down 1

  12. Sam says:

    Far too many forget what Obama says one day and does another.

    February 2, 2009 interview shortly after assuming office.

    “A year from now, I think people are going to see that we’re starting to make some progress,” Obama says. “If I don’t have this done in three years, then there’s going to be a one-term proposition.”

    Like or Dislike: Thumb up 1 Thumb down 2

  13. Sam says:

    @anjin-san:

    There are exceptions to every rule!

    Think of the BIG picture if you are capable.
    Far too many on the left get into specific words and cannot see the idea behind many words.
    Is that a defect in the lefts thinking process?

    Like or Dislike: Thumb up 1 Thumb down 2

  14. jan says:

    @Sam:

    Think of the BIG picture if you are capable.
    Far too many on the left get into specific words and cannot see the idea behind many words.

    Very good point, Sam, regarding the knee-jerk behavior of progressives. They get tongue-tied when regurgitating and/or ironing out the wrinkles of the same talking points, over and over again. So, as the economy goes south, their vision remains locked on the what didn’t work, even having the audacity to say, more of what didn’t work should have been applied so it could have worked.

    Now when gulping poison, this advice may be applicable, that not taking enough might not kill you. So, the solution would be to take more……

    Like or Dislike: Thumb up 0 Thumb down 3

  15. ponce says:

    We had infrastructure spending in the 2009 stimulus bill, and instead of spurring significant expansion and new hiring, it simply resulted in localities hiring the same contractors they usually do, most of whom completed the tasks with existing labor rather than taking on new employees. That bill encompassed hundreds of billions in spending and did nothing

    Did the Stimulus Create Jobs?

    Yes, the stimulus legislation increased employment, despite false Republican claims to the contrary.

    The truth is that the stimulus increased employment by between 1.4 million and 3.3 million people, compared with what employment would have been otherwise. That’s according to the nonpartisan Congressional Budget Office

    http://www.factcheck.org/2010/09/did-the-stimulus-create-jobs/

    Like or Dislike: Thumb up 3 Thumb down 0

  16. mantis says:

    @Doug Mataconis:

    Ah yes, falling back on the whole phony “saved jobs” mantra. Nice try, nice try.

    That’s about as weak as it gets, Doug. You should be embarrassed.

    Like or Dislike: Thumb up 3 Thumb down 0

  17. Ron Beasley says:

    The reality is there is nothing Obama or anyone else can do and they know it. We got the global economy many wanted. Now the Euro and the Euro zone are going down hard and all the TBF banks are still insolvent and sitting on lots of debt that is never going to be repaid. We are very close to a collapse of the world financial system.
    Anyone, including Obama or the Republican candidates, who tells you they can fix it are lying and just playing politics.

    Like or Dislike: Thumb up 0 Thumb down 0

  18. Tano says:

    @Doug Mataconis:

    Ah yes, falling back on the whole phony “saved jobs” mantra. Nice try, nice try

    Huh? Did you read and comprehend your own post? You write:

    it simply resulted in localities hiring the same contractors they usually do, most of whom completed the tasks with existing labor rather than taking on new employees.

    Do you somehow fail to grasp that what you wrote is a description of jobs being saved? I don’t know if you have noticed, but the states are broke. These projects would not have been done – thus the workers would have not had work. The stimulus provided the funds, the projects went forward, and jobs were saved.

    Why are you having a problem understanding this? Is your ideology getting in the way?

    Like or Dislike: Thumb up 3 Thumb down 0

  19. john personna says:

    @jan:

    Very good point, Sam, regarding the knee-jerk behavior of progressives.

    It’s really funny that Jan likes this, because I was stuck figuring out what it even means. Other than a blanket ad hominem attack, of course.

    But this is really key. If you are a far ideologue, on either end, you don’t need to make a case. You just need to say that the other side is the devil. Then, people in your value-group will all nod.

    That’s the way it works.

    Like or Dislike: Thumb up 4 Thumb down 0

  20. Neo says:

    It is fitting that Pres**ent Obama’s Jobs speech is on the same day as the start of the NFL regular season. The agreement between the NFL players and the owners will have saved or created more jobs than any program coming out of Pres**ent Obama’s Jobs speech.

    Like or Dislike: Thumb up 0 Thumb down 5

  21. Ben Wolf says:

    @SteveP:

    Government spending consumes wealth. The only thing that will turn things around is wealth creation.

    This is abject foolishness. The private sector cannot create wealth without government spending. Exactly where do you think dollars come from? Hint: they aren’t being manufactured in Mitt Romney’s office or at Koch Industries or by the Soros Foundation.

    Like or Dislike: Thumb up 1 Thumb down 1

  22. jan says:

    @john personna:

    It’s really funny that Jan likes this, because I was stuck figuring out what it even means. Other than a blanket ad hominem attack, of course.

    …..hardly an ‘ad hominem attack,’ when criticizing another for not looking at the bigger picture, instead of nitpicking specific pet projects. After all, government projects are self-limiting in growing an economy because they are solely depended upon taxpayer revenues. No revenues, no money.

    Hence the comment that ‘government spending consumes wealth,’ correctly implying it is parasitic by definition, when it consumes too much wealth of others in order to become even more powerful in it’s intervention and taxation of others. When government is smaller, it becomes more synergistic in it’s actions, strengthening the participatory powers of both the government and the individual, thus creating a more harmonious, equally functioning environment.

    Like or Dislike: Thumb up 0 Thumb down 1

  23. jan says:

    @Ben Wolf:

    Exactly where do you think dollars come from?

    From orders by Ben Bernacke to turn on the printing presses, decreasing the value of our dollars, so we can say we’re stimulating the economy, which then stalls out once the fake dollars stop being handed out.

    Wow, what a great, superficially created way to get the economy moving!

    Not!

    Did you ever think about the reason why gold is being snapped up by every nation, rather than our dollars! Or, maybe you pass the time fiddling with your monopoly money.

    Like or Dislike: Thumb up 0 Thumb down 1

  24. Ben Wolf says:

    @jan: Ben Bernanke does not control the printing presses, and in case you hadn’t noticed there’s more demand for the dollar than ever. And if you think gold is a good base for a currency, you understand little about the subject.

    But if you feel your dollars are monopoly money, then you have no reason not to give them to me. Right? Put your money (pun intended) where your mouth is.

    Like or Dislike: Thumb up 1 Thumb down 0

  25. john personna says:

    @jan:

    I think you just invented a new argument for Sam, to somehow justify his ad hominem. None of what you suggested was in this:

    There are exceptions to every rule!

    Think of the BIG picture if you are capable.
    Far too many on the left get into specific words and cannot see the idea behind many words.

    Is that a defect in the lefts thinking process?

    That comment was completely devoid of content.

    Like or Dislike: Thumb up 1 Thumb down 0

  26. john personna says:

    Quick Jan, think of the big picture and you will see how wrong you are!

    (See how that doesn’t work?)

    Like or Dislike: Thumb up 1 Thumb down 0