Wednesday, September 14, 2011

Obama's Jobs Package

Last week President Obama gave his jobs speech. He immediately hit the campaign trail calling on Congress to pass the bill. Interestingly, the bill didn't even exist until four days after he gave his speech. This isn't the first time the President has done this. He has also complained about Congress not approving trade deals that have not been submitted to them yet. This shows that the President is more interested in scoring points against Congress than in actually doing something that would help the economy.

It is also unlikely that he is serious about wanting his jobs bill passed. Originally he insisted that it would be paid for and indicated that a Congressional super-committee should take care of that. When he released his actual jobs bill he included funding. Not surprisingly it was limited exclusively to soaking the "rich".

There is some question about what Obama would be willing to sign. At times the White House has said that it knows how Congress works and would accept a compromise. Other statements have said that this is a package, not an a la carte menu, and the President would not sign a piecemeal approach. If the latter is accurate then Obama needs a refresher on the Constitution and how Congress works. The President cannot submit bills, only suggestions.

The money will mainly benefit Obama constituents - public service employees and construction workers, both heavily organized by unions supporting Obama. If this bill is like the first stimulus then the spending rules will be written so that unions have an advantage in getting contracts.

This is another example of the Obama administration being too clever. His indifference to long-term unemployment is hurting him in the polls and the unions are disappointed in his performance on their pet issues. Obama's jobs bill lets him appear to care about the economy while limiting the help to his constituents. As a bonus, by including tax proposals that he knows are unacceptable to the Republicans, he hopes to create a defining issue for the 2012 presidential race.

This is not particularly subtle. Here is what Robert Reich has to say about it:

On Monday the president will offer ways to pay for his $467 billion American Jobs Act mostly by increasing taxes on the wealthy.

I'm all in favor, but it's an odd strategy. If any Republican was prepared to vote for the jobs bill, this will send him or her scurrying.

So if the president was never really serious about getting Republican votes in the first place -- if his jobs bill and the tax increase on the wealthy were always going to be part of his 2012 election year pitch -- why didn't he make his jobs bill big enough to do the job?

Clearly Obama is not serious about helping the economy. Very few economists believe that you can tax one segment of the economy an additional half billion, give it to a different segment and see long-lasting benefits. If it passes, Obama's plan will do nothing except redistribute some wealth. But it is not even likely to pass.

Obama's jobs strategy is nothing but an election strategy. Will the electorate be fooled?

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