Pres. Obama launches his "Job Creation Challenge".
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New jobs plan may be more of old one
To hear the talk at the White House jobs summit, President Barack Obama has dozens of job-creating ideas to pick from when he sketches out his plan in a speech Tuesday.
Hardly.
By the summit’s end, Obama spoke encouragingly of only about a half-dozen ideas — a sign that the president’s chances of reversing double-digit unemployment actually rest on a surprisingly narrow set of options that can squeeze through the political process in Washington.
But some of them better work, Obama knows, or anxiety about the economy could seriously damage the Democrats’ chances in midterm elections next fall, in the way it’s already damaging the public’s view of Obama himself.
Obama on Thursday offered no details but talked of tax credits for job growth, a “Cash for Caulkers” home- weatherization program and looser credit for small businesses.
Another – bringing back low-paying call-center jobs often shipped off to India – might boost the job numbers, but are hardly the kind of family-supporting jobs economists say the country needs. And a fifth highlighted by Obama was better job-training, a long-term prospect at best.
Most of the other ideas bandied about Thursday were too expensive to consider, politically impossible to implement, or conflicted with other ideas offered equally passionately by other voices at the summit.
So already Obama is back to Plan A – spending taxpayer dollars to create jobs and help the jobless.
Congress plans to add $100 billion this year to extend unemployment benefits. And the Obama administration has settled on using unspent bank bailout funds to pay for a new jobs measure — about $70 billion to expand small-business lending, pay for more infrastructure projects and provide aid to state and local governments.
Sounds familiar? It’s a mini-version of Obama’s initial $787 billion stimulus package.
In fact, one idea under consideration is new spending on highways and bridges - shades of the “shovel ready” projects that the president touted in early 2009 but that he conceded Friday hadn't always lived up to their hype.
Treasury Secretary Timothy Geithner endorsed the concept of steering TARP funds toward job creation in an interview on CNBC Friday: “We’re going to be able to use substantial resources, very, very substantial resources to meet not just the immediate challenges facing the country in terms of creating job growth, sparking private investment, but to meet our long-term fiscal challenges.”
Obama got a little break Friday, with news the national unemployment rate fell to 10 percent even, down slightly from its October peak of 10.2 percent, but that’s still a 26-year high, and plenty large enough to pose a political problem for an administration that’s starting to focus on 2010 and even Obama’s re-election prospects in 2012.
The White House hasn’t said what Obama will announce Tuesday at the Brookings Institution – a speech that comes as part of a stepped-up Obama effort to show the public he understands people are hurting, at a time when White House attention has been diverted to Afghanistan and health reform and his poll ratings on handling the economy have suffered.
So Obama said Thursday he wanted immediate bang for the buck – cash to pay for instant job-creation – which is why “Cash for Caulkers” program seems a safe bet for inclusion in his speech.
The plan would provide incentives to homeowners to retrofit their homes for peak energy efficiency, meaning hiring all those workers to make the fixes. The concept is modeled on the wildly popular “Cash for Clunkers” automobile program this summer that was credited with spurring a short term boost in auto sales and boosting GDP growth in the third quarter.
He also said he’d be interested in exploring new tax incentives for job growth, citing Bill McComb, CEO of Liz Claiborne, who said that such government carrots can stimulate corporate hiring. But other experts have expressed concern that tax credits for hiring can be easily gamed by unscrupulous companies who reshuffle workers to generate apparent new hires and then claim a tax credit.
Others argue that tax incentives are the most effective way to create jobs. “These are things that can be done rather quickly and that target the real problem,” said Joseph Brusuelas of Moody’s economy.com.
The president also talked up additional small business credit measures. One way to do that, of course, is to steer unspent TARP funds to the nation’s community banks that are most likely to lend to small area businesses trying to expand. Small business credit is crucial to jumpstarting hiring, said Brusuelas. “These are ideas that need to be pursued,” he said. “Emerging markets are booming, and the dollar is low, and that should be good for small businesses that can export.”
Obama also cited the success a company called Arise Virtual Solutions has had in bringing call-center jobs – typically among the first to be outsourced to cheap-labor countries – back to the United States in what he called “reverse job migration.”
And finally, he endorsed a proposal by American Federation of Teachers President Randi Weingarten to use schools as bases for after-hours and weekend job retraining programs for parents. Weingarten said that about $1.9 million per year per school district could be enough to start such programs, which would include the training programs themselves as well as child care and onsite nursing and social work facilities. “That way, parents don’t have to worry about where their children are while they’re in getting job training,” she said.
But perhaps more even than generating specific new ideas for Obama to consider, Thursday’s job summit amounted to a vivid display of widely divergent opinions for improving job growth – between Democrats and Republicans, business and labor, big companies and small.
Disney CEO Robert Iger, for example, used one of the break-out sessions to propose a cut in the corporate tax rate – a move that would cost the Treasury billions in uncollected funds at a time when the deficit is already $1.4 trillion.
“I think that’s where I would start,” Iger said. “It’s definitely an issue not just for the Disney company but for the whole television industry.”
Other ideas would be extremely difficult to get through a politically gun-shy Congress in an election year. Larry Lindsey, a former top economist to President George W. Bush, proposed expanding the number of visas for high-skilled immigrant workers. “Intellectual capital is extremely mobile on this planet and we are erecting barriers to it. It is very hard to bring talented people into this country,” Lindsey said.
Although it has corporate support, opening the borders to more new immigrants to take jobs in this country would be a tricky sell in recession-wracked America. In one of the White House jobs summit sessions, William Hite of the plumbers and pipefitters union said his members have lost jobs to foreign construction workers.
“We have a problem with foreign workers coming over doing construction work on visas. We have members who would be there in a heartbeat to do the jobs… You’re bringing in foreign workers to take their spots and that’s not right,” Hite said.
And jobs summit participants were similarly split on foreign trade. Boeing CEO James McNerney argued that the White House should push for conclusion of the stalemated Doha round of world trade talks, saying,
“Settling for a half loaf is better than holding out for something that may never happen.”
But Teamsters chief James Hoffa offered the White House much more skeptical input on trade agreements: “We’ve had a bad trade policy going back to Clinton, going back to Bush, basically opening up our markets to closed markets,” Hoffa said. “If this government wants to do something, enforce the trade laws that you have.”
Sources: Politico, MSNBC
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