By Alexander Bolton - 09/07/11 09:00 AM EDT
President Obama’s new effort to revive the ailing economy may be too little, too late, according to Democrats and liberal policy experts.
They contend that Obama missed his chance to turn the economy around by November 2012, but still want him to call on Congress to move an aggressive new jobs plan — even if it has little chance of passing.
“The president has to bring forward a bold proposal. He can’t start the process by negotiating with himself,” said Sen. Bernie Sanders (I-Vt.), who caucuses with Senate Democrats. “He needs to say, ‘If we do A, B and C, we can create millions of new jobs,’ and take it to the American people.”
The risk for Obama, however, is that he could appear weak by putting forth a jobs proposal that is immediately viewed as dead on arrival on Capitol Hill.
Liberal activists say the best chances for passing legislation that would have really spurred growth was in the last Congress, when Democrats controlled the House and as many as 60 seats in the Senate.
Obama successfully pushed a stimulus bill through the 111th Congress, but it attracted only a few votes from Republicans and was criticized by liberals as too small. The White House vowed it would keep unemployment rates at around 8 percent. Now, the nation’s unemployment rate stands at 9.1 percent.
Dean Baker, co-director of the Center for Economic and Policy Research, said Obama made a mistake by not pushing for more stimulus when Democrats had the votes in 2009 and 2010.
“He should have said, ‘This is a great first start, but we’re going to need more,’” Baker said.
Obama has dropped hints he will push ideas that he knows won’t pass anytime soon.
During an appearance on “The Tom Joyner Morning Show” last week, Obama said, “If Congress does not act, then I’m going to be going on the road and talking to folks, and this next election very well may end up being a referendum on whose vision of America is better.”
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At press time, Bloomberg reported that Obama will propose boosting job growth with a $300-billion plan that focuses on tax cuts, infrastructure spending and direct aid to state and local governments.
The president is feeling pressure from the left and right on his highly anticipated speech. Speaker John Boehner (R-Ohio) and House Majority Leader Eric Cantor (R-Va.) on Tuesday called on Obama to meet with congressional leaders on both sides of the aisle before he delivers his address.
Some Democrats are publicly calling on Obama to embrace hundreds of billions of dollars in stimulus spending, complaining that Washington is focusing too much on the deficit and too little on job creation.
Without drastic action, they see little hope of turning the economy around in the next 14 months. And they concede Republicans, who are feeling more confident about winning back the White House next year, will block all of Obama’s ambitious plans.
Republicans counter that they agree with Obama that three pending trade agreements, with South Korea, Colombia and Panama, would create jobs. Those deals are expected to move later this year.
The worst scenario for many liberal Democrats would be if Obama proposes a modest, centrist approach that does little to encourage new hiring and gives them little ammunition against Republicans in the months ahead.
Rep. Marcy Kaptur (D-Ohio) said she wants Obama to emphasize incentives for domestically manufactured goods and stripping incentives for companies that outsource production overseas.
She also wants Obama to endorse and Congress to appropriate $16 billion immediately for a civilian conservation corps that would be led by unemployed military veterans.
Former Sen. Byron Dorgan (D-N.D.) said Obama should throw his support behind a made-in-America initiative that would provide incentives for companies that hire workers in this country. Like Kaptur, he says the Congress should do everything it can to eliminate incentives for companies that move production facilities overseas and outsource U.S. jobs.
“The country needs to see this as a very big crisis. You can’t nibble around the edges,” Dorgan said. “The president doesn’t have a choice but to be very bold.”
Still, Dorgan realizes the political realities: “The things we’ve seen from Congress [do not] suggest that very much can happen.”
Baker would like Congress to pass $100 billion a year in state aid to keep teachers, police officers and firefighters on local government payrolls. But he admits that is not likely to happen, given the political environment in Congress.
He thinks it’s more likely Obama could convince Republicans to support a work-share program that would redirect unemployment funds to encourage employers to keep workers at reduced hours and wages instead of firing them, a program that has worked well in Germany.
Jared Bernstein, a senior fellow at the Center for Budget and Policy Priorities and a former top economics official in the Obama administration, said an infrastructure program that addressed the national backlog of school maintenance would be effective. But he admits “it’s going to be a very heavy lift” to pass it through Congress.
Bernstein said he expects Obama to propose extending the payroll tax holiday and unemployment benefits, which he thinks Republicans are likely to accept.
He said those proposals could reduce the 9.1 percent unemployment rate by half to three-quarters of a percentage point. But that would likely fall short of what many Democrats think could be effected by an ambitious stimulus spending program.
Scott Lilly, a senior fellow at the Center for American Progress and the former Democratic staff director of the House Appropriations Committee, said Congress has waited on the private sector for three years to begin creating more jobs, and it has not happened. He said the government needs to borrow and spend more to augment consumer demand.
But he thinks the time for getting Congress to act might have passed.
“I think they’re going to bury their heads in the sand and do absolutely nothing,” Lilly said.