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Obama’s Uninspiring Pivot
Posted By Arnold Ahlert On September 9, 2011 @ 12:16 am In Daily Mailer,FrontPage | 52 Comments
President Obama made his highly-anticipated pivot to job creation last night. The “American Jobs Act” is the name of the plan, and the one recurring theme the president repeated over and over again is that “[Congress] should pass it right away.” The president’s tone was forceful, and much like the promise he made in the midst of the debt ceiling battle, he promised to take his case directly to the people. Yet if this speech was intended to be a transcendent effort aimed at galvanizing a nation, it didn’t work.
“Tonight we meet at an urgent time for our country,” Mr. Obama began. “We continue to face an economic crisis that has left millions of our neighbors jobless, and a political crisis that has made things worse.” From the president who claimed to have created or saved four million jobs, and whose administration has been touting an economic recovery for the better part of two years, this was a rather startling, if realistic, admission.
Yet in a roundabout way, he once again shifted blame away from himself and his administration, noting that Americans who “grew up with faith in an America where hard work and responsibility paid off…for decades now…have watched that compact erode. They have seen the deck too often stacked against them.” And once again, he asked whether or not “we can stop the political circus and actually do something to help the economy; whether we can restore some of the fairness and security that has defined this nation since our beginning.”
Some of the details of the the American Jobs Act released to the press include increasing and extending a payroll tax cut for workers from 4.2 percent to 3.1 percent, costing $175 billion. The president also promised business owners a 50 percent cut in payroll taxes “if they hire new workers or raise workers’ wages.” The latter of these two ideas is new. The former is an extension of something Congress has already done.
The president then retreated to familiar ground. Noting that we have “badly decaying roads and bridges,” “highways are clogged with traffic” and that our “skies are the most congested in the world,” Mr. Obama proposed more spending on infrastructure, including “at least 35,000 schools.” Paying for these improvements will be done by setting up “an independent fund to attract private dollars and issue loans based on two criteria: how badly a construction project is needed and how much good it would do for the economy.” Price tag? $25 billion.
This proposal is remarkably similar to the 2009 stimulus package which also targeted “shovel-ready jobs.” One is left to imagine why this time around such an idea would be more successful. Adding to the familiar, the president also proposed $35 billion in spending to prevent the layoffs of more than 280,000 teachers, and the hiring of additional ones. If that gives one a sense of deja vu, it’s because the president asked for $50 billion to avert such layoffs in June of 2010.
The president also issued up a contradiction. While offering businesses a “$4,000 tax credit if they hire anyone who has spent more than six months looking for a job,” the plan “also extends unemployment insurance for another year.” This would allow Americans to collect federal unemployment benefits for as long as three years. A number of studies show that workers who collect benefits for longer periods of time stay unemployed longer. Thus, incentivizing businesses, as opposed to workers themselves, is not likely to be effective. Yet the president insisted that “Democrats and Republicans in this Chamber have supported unemployment insurance plenty of times in the past. At this time of prolonged hardship, you should pass it again–right away.”
Mr. Obama then moved on to explain how he would pay for the bill, noting that the same Congress which cut government spending by $1 trillion in July, and must come up with an additional $1.5 trillion by Christmas, should “increase that amount so that it covers the full cost of the American Jobs Act.” Again, it remains up to Americans to remember two things: one, this president wanted a “clean” debt ceiling bill with no spending cuts at all, and, two, that the so-called spending “cuts” are nothing more than a reduction in projected increases in federal spending. Mr. Obama then promised to release a plan to “stabilize” long-term debt on Monday.
Not reduce the debt. Stabilize it.
After that, another old theme with a different twist was re-visited. After acknowledging that an aging population and rising health-care costs make Medicare and Medicaid unsustainable in their present form, which he knows concerns his party, he noted that Republicans don’t want to raise taxes “on those who are most fortunate and can best afford it.” Ironically, he then proposed tax reform “where everyone gets a fair shake, and everybody pays their fair share.” That may come as a surprise to the 47 percent of Americans who pay no income taxes at all. He then proposed either-or choices between “tax loopholes for oil companies,” or “money to give small business owners a tax credit,” “tax breaks for millionaires and billionaires,” or “put(ting) teachers back to work,” even as he contended, “This isn’t political grandstanding. This isn’t class warfare.”
Yet after a few more details about “strengthening competitiveness” and working “side-by-side with America’s businesses,” Mr. Obama returned to ideological brow-beating. “Some of you sincerely believe that the only solution to our economic challenges is to simply cut most government spending and eliminate most government regulations,” the president said, after which he promised to get rid of wasteful spending and burdensome regulations.
But then he erected a series of straw men. “But what we can’t do–what I won’t do–is let this economic crisis be used as an excuse to wipe out the basic protections that Americans have counted on for decades,” he intoned. “I reject the idea that we need to ask people to choose between their jobs and their safety. I reject the argument that says for the economy to grow, we have to roll back protections that ban hidden fees by credit card companies, or rules that keep our kids from being exposed to mercury, or laws that prevent the health insurance industry from shortchanging patients…that we have to strip away collective bargaining rights to compete in a global economy. We shouldn’t be in a race to the bottom, where we try to offer the cheapest labor and the worst pollution standards.”
One is left to imagine which group of Americans (read: Republicans) wants to be in a race to the bottom.
The president then ran through a litany of achievements fostered by government that made it sound like America would have been a shell of a nation otherwise. Once again this is unsurprising. Despite all the rhetoric about the nation being composed of “rugged individualists” who are “strong and self-reliant,” with the ”drive and initiative of our workers and entrepreneurs that has made this economy the engine and envy of the world,” Mr. Obama remains firmly convinced that government is the engine of prosperity, and that Americans should “tell Washington that doing nothing is not an option.”
Perhaps the most disingenuous moment of the night came when the president noted that there is “skepticism about whether the politics of the moment will allow us to pass this jobs plan–or any jobs plan,” and that ”some of you have decided that those differences are so great that we can only resolve them at the ballot box.” He further noted that “the next election is fourteen months away. And the people who sent us here–the people who hired us to work for them–they don’t have the luxury of waiting fourteen months. Some of them are living week to week; paycheck to paycheck; even day to day. They need help, and they need it now.”
That is incorrect. Americans needed help two and a half years ago. It is Mr. Obama, whose approval ratings with respect to the economy are in free fall, who is currently in need of the most help.
Moreover, context is everything. Every proposal the president made last night must be viewed within the framework of legislation that he and his party have already passed. For example, no matter how sincerely the president proposes “cutting red tape” or getting rid of “rules and regulations that put an unnecessary burden on businesses at a time when they can least afford it,” he is not about to jettison the 800-pound gorillas of red tape and burdensome regulations known as the health-care and FinReg bills. Those two pieces of legislation alone comprise 4700 pages of mandates, which will more than offset any savings to be found in last night’s speech. They are also the primary generators of the massive uncertainty that currently inhibits job creation.
And the additional spending, “paid for” or not, must be viewed within the context of an Obama administration that has amassed the highest annual deficits in the history of the nation, and is well on its way to obliterating the record levels of debt the Bush administration accrued in eight years in less than half that amount of time. The newfound affinity for small businesses must be seen within the context that “millionaires and billionaires paying their fair share” of taxes really means individuals making $200,000 per year and couples making $250,000, many of whom are exactly the small business owners the president ostensibly aims to help.
And despite Mr Obama’s assertion that he is not engaging in class warfare, the context remains that people who champion limited government really want to, as the president contended, “just dismantle government, refund everyone’s money, let everyone write their own rules, and tell everyone they’re on their own…”
The president needed a home run last night. He didn’t hit it out of the infield.
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