by Danielle Kurtzleben

Obama frames proposals as broadly bipartisan and unobjectionable

He spoke before a joint session of Congress, but with his jobs speech, President Obama was sending a clear message to voters: I've done all I can. If you want to blame someone, blame these guys.

In his Thursday-night address, the president introduced the American Jobs Act, a $447-billion plan whose proposals include a payroll tax cut extension, an extension of unemployment insurance, incentives for businesses that hire new workers or give raises to existing employees, and plans to improve infrastructure and modernize schools. As a nod to lawmakers who have been notably hesitant to spend, the president assured that "everything" in the package "will be paid for." The broad array of policies proposed contained few surprises, but just as prominent as the president's policies was his clear and emphatic political message -- that he is working to reach a bipartisan compromise on job creation, and a refusal to pass the bill would be mere political gamesmanship on the part of congressional Republicans.

"There should be nothing controversial about this piece of legislation," the president told the assembled lawmakers. "Everything in here is the kind of proposal that's been supported by both Democrats and Republicans -- including many who sit here tonight."

Indeed, measures like infrastructure investment, corporate tax reform, and ratifying trade agreements have all previously received bipartisan support. But the president reached out to the right in key ways, perhaps most notably by acknowledging the need for Medicare reform, acknowledging that, "with an aging population and rising healthcare costs, we are spending too fast to sustain the program." He later added, "We have to reform Medicare to strengthen it."

For David Shulman, senior economist at UCLA's Anderson Forecast, this willingness to reform entitlements lays the groundwork for long-term policy movement. "That to me is a big deal. That to me is going to be the big deal not for the fight on the immediate [economic] stimulus but how we deal on long-term budget issues," he says.

The president was also notably bolder than expected on hiring incentives, offering a full payroll tax holiday on payroll increases of up to $50 million, whether via new hires or pay increases. David Kautter, managing director of American University's Kogod Tax Center, considers that a sizable incentive, but also notes that incentives address only one aspect of hiring. While employers worry about the cost of hiring, they also worry about the sustainability of new employees. "Hiring is a serious decision for most businesses," he says. "Most businesses would like to see some possibility of a sustained need for the worker. In other words, some increase in demand out there." And no economic proposal can promise sustained economic demand.

The president presented all these ideas as unobjectionable, but as Kautter points out, "Saying it don't make it so." Judging from the president's remarks, the American Jobs Act will certainly spur points of contention between the two parties. The president acknowledged conservative calls for deregulation, but indicated that he will not cede all ground on these points: "We shouldn't be in a race to the bottom, where we try to offer the cheapest labor and the worst pollution standards. America should be in a race to the top."

Even with the long-awaited speech now over, one key point remains to be determined: exactly how it will be funded. This may prove to be the bill's toughest hurdle to clear. The president called upon Congress to increase the amount by which the so-called debt reduction "super committee" plans to cut the deficit by $447 billion, then promised to release on Monday a "more ambitious deficit plan" that will "not only cover the cost of this jobs bill, but stabilize our debt in the long run."

Kautter says that Republican lawmakers could easily take issue with both the speed and substance of this deficit plan. "He said everything will be paid for eventually. Well, I think people can say they'd like it paid for sooner," he says. In addition, the president advocated a tax code under which "wealthy Americans and CEOs" pay their "fair share" in order to help boost economic growth -- an idea that is anathema to many fiscal conservatives.

Near the close of his speech, Obama invoked the words of President Kennedy: "Our problems are man-made -- therefore they can be solved by man." The president, however, failed to note that Kennedy never had to deal with a divided Congress. The nation will have to wait and see if such optimism is warranted.

 

In Jobs Speech, Obama Passes the Buck to Congress