‘Let’s rebuild America!” Pres. Barack Obama urged a crowd of cheering supporters Monday at an outdoor town-hall event in Cannon Falls, Minn., the first stop on his three-day bus tour across the Midwest. Solving the debt-and-deficit problem, he assured attendees, was really “not that complicated.” Therefore, it was time now for Congress (because they hold all the power in Washington, apparently) to stop worrying about it and turn their focus to re-stimulating the economy as soon as possible. “In the short term, we should actually make more investments that would get people to work and get the economy moving,” Obama said, proceeding to lay out a series of “stimulus” measures, none of them new — an embarrassing acknowledgement of the fact that when it comes to creating jobs and growing the economy, this administration is, quite simply, out of ideas.
This is the cornerstone of Obama’s plan to “rebuild” the country, literally, through the creation of a National Infrastructure Innovation and Finance Fund, which would “directly provide resources for projects through grants, loans, or a blend of both.” The idea would be to leverage public funds (about $5 billion per year) in order to attract significant private-sector investment in infrastructure (up to $640 billion) over the next decade. Obama predicted this would “put 100,000 folks to work right now . . . rebuilding our roads and our bridges and our vital infrastructure all across the country.”
It is an idea that enjoys support across party and ideological lines. Legislation to establish the infrastructure bank is sponsored by Sens. John Kerry (D., Mass.) and Kay Bailey Hutchison (R., Texas), and it has the approval of such odd counterparts as Thomas J. Donohue, president of the U.S. Chamber of Commerce, and Richard Trumka, president of the AFL-CIO. However, as Conn Carroll of the Washington Examiner accurately points out, the proposal is likely to amount to little more than “just another stimulus boondoggle.”
It was a mere two months ago that Obama wryly quipped to members of his own Council on Jobs and Competitiveness that “shovel-ready was not as, uh, shovel-ready as we expected” in an attempt to account for the obvious shortcomings of the original stimulus package, Carroll reminds us. Particularly given the fact that the administration will be tasked with hiring the federal employees who will be responsible for dishing out these new “grants, loans, or a blend of both,” is there any reason to expect a different result? Perhaps they could funnel some of the money toward the administration’s beloved “affordable” high-speed-rail initiative, which in California is already proving to be not as, uh, affordable as they expected.
By suggesting an extension to the payroll-tax holiday, originally enacted in December 2010 during the lame-duck period and set to expire at the end of this year, Obama is clearly attempting to make Republicans an offer (tax cuts!) they can’t refuse. However, that’s precisely what they’ve been doing thus far.
At an annual cost of about $112 billion, Republicans are questioning the efficacy of another temporary tax reprieve, and arguing for a more permanent, comprehensive tax reform instead. “They’ve tried this once, and it hasn’t seemed to be working,” said Rep. Jeb Hensarling (R., Texas), a newly appointed member to the so-called “supercommittee” on deficit reduction. Sen. Lamar Alexander (R., Tenn.), a member of the GOP leadership team, concurred. “We don’t need short-term gestures, we need long-term strategies that build into our system simpler taxes, lower taxes, fewer mandates, lower costs, more certainty,” he said. “If short-term government programs work, we wouldn’t have 9 percent unemployment today, because the government has tried it. So we’ve proved that doesn’t work, unfortunately.”
And as always, there’s a catch. The president wants to pair the payroll-tax extension with an extension of soon-to-expire unemployment benefits, at a cost of about $43 billion. A failure to do both, Obama has warned, “could mean 1 million fewer jobs and half a percent less growth.” This coming from the same people who insisted that the stimulus was necessary to keep unemployment below 8 percent.