JAMES C. CAPRETTA
Let’s get this straight: The president, now in his third year in office, is worked up with righteous indignation because Congress hasn’t done enough on jobs. Really?
During his first two years in office, he had commanding majorities in the House and Senate. He could have passed just about any kind of economic agenda he wanted. What did he do? He passed an $800 billion stimulus bill that didn’t work and then spent a year and a half passing the most controversial and burdensome entitlement expansion in half a century. That’s pretty much the entire Democratic economic agenda.
Now he has the audacity to suggest that Congress is to blame for not doing more? And, in the middle of yet another highly partisan presidential lecture, that anyone who opposes his failed approach to job creation is somehow doing so for partisan reasons?
That kind of speech may make the president and his partisan supporters feel better for a week or two, but it won’t produce bipartisan legislation that might actually help the country. What the president should be aiming for is real results for voters. That’s the only thing that can save him now. Instead he chose more partisan posturing. The result is that he will almost certainly go into 2012 with the worst economic record for a first-term president in modern history. Good luck with that.
— James C. Capretta is a fellow at the Ethics and Public Policy Center. He was an associate director at the Office of Management and Budget from 2001 to 2004.
There is no magic bullet that will fix this economy, a clear economic fact that no one has told the president. The current gap between gross domestic product and potential GDP is about $1.3 trillion. Not even a naïve Keynesian would expect the president’s plan to have enough of a multiplier effect to bring us back to normal.
Consumers have been spending cautiously, partly due to past over-borrowing and partly from a need to offset future tax hikes. It sounded good when the president said, “Everything in this bill will be paid for — everything,” but the sad truth is that the president wants to use unspecified future spending cuts and off-budget loan guarantees. With low credibility on financing, the new plan will fail to boost consumer spending.
There are certainly some things to like in the plan, most notably reducing corporate tax preferences in order to lower tax rates. And the president was right to strike an optimistic tone — despite the current economic malaise, the country is still the land of opportunity. He was wrong, however, to imply that a great new jobs bill is what’s needed to fulfill that opportunity.
— Bill Conerly is a senior fellow at the National Center for Policy Analysis.