Editorial: Jobs plan deja vu
By H. Darr Beiser,, USA TODAY
In some ways, sadly, yes. When Obama made his first pitch for an $800 billion stimulus bill shortly after he took office in 2009, the economy was in free fall and jobs were hemorrhaging. The desperate goal then was to avoid another Depression. The stimulus helped do that, but two-and-a-half years later, the economy continues in "crisis," as Obama conceded, and fears of a double-dip recession are rising.
The Federal Reserve's latest forecast shows the jobless rate lingering as high as 7.5% in 2013, uncomfortably close to today's 9.1% rate and well above what's considered to be full employment. In the face of powerful economic forces — European bank problems, globalization and technological disruption, to name a few — nothing Washington does is likely to make a huge difference. Downturns such as this one — caused by a financial crisis, not the normal ups and downs of the economy — happen only once every half-century or so and typically last several years.
Nevertheless, with millions of Americans suffering through some of the most protracted joblessness in the nation's history and the danger of renewed recession vivid, there's ample reason to try to mitigate the damage.
Like the 59-point plan that Republican presidential hopeful Mitt Romney unveiled Tuesday, Obama's new $447 billion program might help at the margins. The Congressional Budget Office says the 2009 stimulus, about double the size of the new proposal, added somewhere from 1 million to 2.9 million jobs, and kept the unemployment rate from climbing as much as 1.6 percentage points higher. That's a lot of human misery avoided.
Most editorials are accompanied by an opposing view — a unique USA TODAY feature that allows readers to reach conclusions based on both sides of an argument rather than just the Editorial Board's point of view.
The question is whether the nation can afford Obama's "American Jobs Act" without worsening a debt problem that threatens to spiral out of control.
Obama promised in his feisty address to Congress on Thursday night that his program would be fully paid for, with details to come soon. No new jobs spending should pass without being welded to major deficit reduction.
The plan Obama detailed includes several unappealing ideas. It relies heavily on slashing the Social Security payroll tax for an extra year. This would give employees more money to spend and employers an incentive to hire, but it would further deplete a program that is already running in the red. It would squander tax cuts on companies that need more consumer demand, not tax breaks, to induce them to hire. And it would make it even harder to restore the tax a year from now.
More promising is Obama's proposal for spending on roads, bridges, school construction and other infrastructure. Such work has to be done sooner or later, so why not accelerate it to create jobs now?
Details aside, the larger point is that it's possible to develop a plan that both adds jobs now and reduces long-term debt, and Obama left Republicans an interesting choice. The chances they'll pass Obama's plan "right away," as the president demanded, are zilch. But stonewalling as they did during the debt-limit fiasco is likely to play into the president's hands. Perhaps that dilemma works in the public's favor. It's wildly optimistic, but there's at least a chance the feuding will be dropped just long enough to do some governing.
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