The President's Jobs Plan
Robert B. Reich

In response to last week's awful jobs report -- unemployment rising to 9.2 percent in June, with only 18,000 new jobs (125,000 are needed each month just to keep up with the growth in the potential labor force) -- what did the president do?

He urged Congress to extend the temporary reduction in the employee part of the payroll tax, approve pending free-trade agreements, and pass a measure to streamline patent procedures.

That, apparently, is his jobs plan.

To call it inadequate would be a gross understatement.

Here's what the president should have said:

This job recession shows no sign of ending. It isn't a temporary jobless recovery. It can no longer be blamed on supply-side disruptions from Japan, Europe's debt crisis, high oil prices or bad weather.

No, this is something else -- and it's going to be with us for years unless Washington wakes up and takes action. We're in a vicious cycle where consumers won't buy more because they're scared of losing their jobs and their pay is dropping. And businesses won't hire because they don't have enough customers.

We've been wasting time in a game of chicken over raising the debt ceiling.

It's pure extortion. Republicans want you to believe the deficit is responsible for the bad economy. The truth is the reverse. When the private sector cannot and will not spend enough to get the economy going, the public sector must step into the breach and spend more.

My first priority is to get Americans back to work. I'm proposing a jobs plan that will do that.

First, we'll exempt the first $20,000 of income from payroll taxes for the next two years. This will put cash directly into American's pockets and boost consumer spending. We'll make up the shortfall by applying Social Security taxes to incomes over $500,000.

Second, we'll re-create the WPA and Civilian Conservation Corps -- two of the most successful innovations of the New Deal -- and put people back to work directly. The long-term unemployed will help rebuild our roads and bridges, ports and levees, and provide needed help in our schools and hospitals.

Young people who can't find jobs will reclaim and improve our national parklands, restore urban parks and public spaces, recycle products and materials, and insulate public buildings and homes.

Third, we'll enlarge the Earned Income Tax Credit so lower-income Americans have more purchasing power.

Fourth, we'll lend money to cash-strapped state and local governments so they can rehire teachers, firefighters, police officers, and others providing needed public services. This isn't a bailout. When the economy improves, normal scheduled federal outlays to these states and locales will drop by an amount necessary to recover the loans.

Fifth, we'll amend the bankruptcy laws so struggling homeowners can declare bankruptcy on their primary residence. This will give them more bargaining leverage with their lenders to reorganize their mortgage loans. Why should the owners of commercial property and second homes be allowed to include these assets in bankruptcy but not regular homeowners?

Sixth, we'll extend unemployment benefits to millions of Americans who have lost part-time jobs. They'll get partial benefits proportional to the time they put in on the job.

Yes, most of these measures will require more public spending in the short term. But unless we get this economy moving now, the long-term deficit problem will only grow worse.

I'm also aware some in Congress will fight against this jobs plan on ideological grounds. They don't like the idea that government exists to help Americans who need it. And they don't believe we all benefit when jobs are more plentiful and the economy is growing again.

But I am eager to take them on. Average Americans are hurting, and their pain is not going away.

We bailed out Wall Street so that the financial system would not crash. We stimulated the economy so that businesses would not tank. Now we must help ordinary people on the Main Streets of America -- for their own sakes, and also so that the real economy can fully mend.

My most important goal is restoring jobs and wages. Those who oppose me must explain why doing nothing is preferable.

(Robert Reich, former U.S. Secretary of Labor, is professor of public policy at the University of California at Berkeley and the author of "Aftershock: The Next Economy and America's Future (Vintage)."