The Plan

September 8th, 2011 at 10:01 am

From this AMs WaPo, a jobs plan that could clock in at north of $300 billion:

“The president’s plan, in large part, will call for continuing current measures to stimulate the economy, including a 2 percentage-point payroll-tax cut and extended unemployment benefits, administration officials say. Obama is also likely to call for an additional tax cut for companies that hire workers. Those measures together could cost about $200 billion next year.

Obama is planning to propose $100 billion or more in spending on infrastructure, state and local aid, and programs that target people who have been unemployed for more than six months, according to officials and other people familiar with the deliberations.

I’ve heard that a FAST!-like idea will be in there too, a great way to quickly get some folks facing high levels of joblessness back to work repairing public schools.

All told, it looks to me like the plan accomplishes three critical goals:

–it’s large enough to significantly move the needle on unemployment;

–it’s carefully crafted to have bipartisan appeal, at least in normal times;

–it solidly pivots the President from targeting the budget deficit to targeting the much more immediate problem: the jobs deficit.

And yes, congressional Republicans are already making negative noises, which is where point #2 comes in.  The President needs to be able to credibly argue that those blocking his plan are doing so not for substantive, economic reasons, but for political gain.*  And they are doing so at a time when the American people need substance, not strategy.

*NPR had a great story this morning featuring Republican Senator Lamar Alexander saying he was against the payroll tax cut.  They then re-played an interview with him from about nine months ago where he argued that it was a great idea that would put money in people’s paychecks and thus stimulate growth and jobs.

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16 comments in reply to "The Plan"

  1. Fr33d0m says:

    So basically he’s still stuck in his own feedback loop. Here’s a thought, if 800B+ didn’t solve the problem what makes anyone think 300B+ will? I get the move the needle proposition, but that isn’t solving the problem and it isn’t shaping the debate at all–in fact, its more like avoiding the larger debate and so avoiding the solution.

    This will rightfully be seen as a sad failure and his numbers will likely continue their dive. We’ll see if people can be moved to support him based on half measures.


    • Fr33d0m says:

      And I should add that I don’t think his plan should only be full of things he’ll never get passed. I do think he at least needs to enter the debate on what is really needed to address demand. I suppose it doesn’t need to be in his plan, but he does need to try to shape the debate at some point in time.


      • markg8 says:

        I agree this looks like too little. I’d like to see some specific numbers of how much this will move the needle on unemployment when the plan is fleshed out after the speech. It’s not only hard for him to push higher spending than this when Republicans will just reject it, hell it’s a given they’ll reject anything, but the bigger problem is he looks like he’s reversing course 180 degrees from the debt ceiling deal and the moron media and indies probably won’t understand.


    • Dan Furlano says:

      Because it wasn’t 800b of stimulus and the 200b that got delivered actually worked.


      • Fr33d0m says:

        No, it didn’t work and yes it was an 800b+ stimulus. I know it created jobs and turned the fall into tepid growth, but it was too little and didn’t solve the problem.


        • Candlbox says:

          I would agree with Dan that not all of the 800B was stimulus (e.g. the AMT was going to happen anyway, which by definition makes it not a stimulus), but I agree with you that 200B understates the value stimulus (e.g. aid to states and tax cuts).

          In the end, I think we’re all saying the same thing. The 800B wasn’t big enough, and the forthcoming 300B proposal won’t be enough, even if it becomes law.


          • Dan Furlano says:

            Agree.


          • Fr33d0m says:

            You can carve the stimulus to death, it was still the stimulus and it doesn’t affect my point by much. I’ll take the “not all of the stimulous was actually stimulating” argument, but that doesn’t do much to my point. The battleground has only gotten worse. If this passes, how much do you think will be stimulating? I don’t think much of it will.


  2. Comma1 says:

    Please comment on the discrepancy between your post, where you say Obama’s 300 billion plan will “significantly move the needle,” and Ezra Klein’s post where he states that anything less than 400 billion (a year) will be a net federal drag on the economy.

    Also please explain how extending unemployment and a payroll tax (presumably the most costly aspects of his plan) is different from what we have been doing with no success for the past three years.

    Lastly, if you could comment on the optics of further tax cuts. They are 1) a repubo move, 2) aren’t noticeable by the general topic, so they 3) won’t change the war of ideas, in other words the debate in the country.

    At first blush, this does not appear to be a pivot toward trying to solve the unemployment problem but rather a pivot toward campaigning and running away from difficult problems.


  3. Sandwichman says:

    Jared, I think you’ve listed the three critical goals in the wrong order. “Moving the needle” depends on getting implemented. It won’t happen UNTIL Congress acts — which Congress won’t. But even if Congress acts, nothing will happen for months.

    Meanwhile, what the administration appears to have crafted is another “preemptive compromise.” This is the program Obama might hope to achieve through compromise with a reasonable loyal opposition. But since the opposition is not reasonable, the final deal will have to be a lot more modest than even this one. So maybe the final jobs plan will clock in south of $150 billion instead of north of $300 billion. And maybe that $150 billion will be paid for with some further concessions on entitlement spending somewhere down the line…

    More “mush from the wimp”?


  4. Michael says:

    There was a question of whether Obama would propose A) something big enough to inspire and rally the nation and that would be large enough to end the depression, or B) something modest that would allow him to say he proposed something without actively fighting with the Republicans.

    I didn’t think there was reason to expect option A, and now we know it’s option B. I think it’s worse than the headline number of $300B might lead one to believe. Two-thirds of the proposal is effectively a continuance of current policy — payroll tax holiday and unemployment benefits. Of the remaining one-third, it’s split between a little aid for states, a little infrastructure, and a little for “programs that target” the long-term unemployed.

    It’s hard to see how any proposal by the president would pass the House without including legislation to scale back Social Security or Medicare. So the net result is to run away from a fight about principles, to cede the argument to the Republicans, and to achieve nothing of substance for addressing the ongoing depression.


  5. Michael says:

    I was wondering what the Establishment Dem reaction was going to be, and now I know:

    pretend that it’s big enough, and punch hippies for pointing out that it’s less than 1/4 of what’s needed.

    This is worse than nothing. If it passes, it will discredit Keynesian economics.


    • jo6pac says:

      Thank You from a old Hippy:)


    • Chigliakus says:

      The “pretend it’s big enough and punch hippies for suggesting otherwise” is the same plan as last stimulus. The last stimulus is already pointed to (wrongly) as evidence of the failure of Keynesian economics. Nothing new here, sadly. I wonder if social trends here in the states will follow those of Japan over the next (lost) decade? I fear we’re going to find out.


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