Another big speech is on the way from President Obama. You'll be excused if you don't hurry up and set your DVR.
After the absurd summer spectacle over the national debt, Washington politicians realized they still hadn't done anything about America's biggest problem: a lack of jobs. So they pledged to dream up a few ideas after returning from their August vacations.
With Congress on the most undeserved monthlong recess of all time, President Obama has had a breather from the sideshow of clownish legislators, giving him a chance to develop a fresh jobs agenda of his own. Obama says he'll lay out his jobs plan during a speech in early September, while returning members of Congress are still working off the jetlag from their late-summer junkets.
Expectations are modest. Obama gives a lot of speeches, often underwhelming his audience with heartfelt assurances and inspiring words that nonetheless lack the punch of decisive new proposals. But the jobless problem is becoming so severe that it threatens to trigger another recession. Obama's prospects for re-election hinge on whether the economy recovers or weakens over the next 12 months. So perhaps he'll really propose something new and exciting. Here are seven ways he could break new ground and do something productive to help create jobs, boost the economy, and even revive a bit of faith in government:
Go big. Obama supports a lot of small-bore measures that would probably help create jobs eventually—such as targeted tax breaks meant to spur green-energy production and other types of business activity—but a recitation of numerous tactical measures would simply reinforce the impression that Obama is an unimpassioned technocrat who left his soul on the '08 campaign trail. So would small-sounding numbers, like the laughable $100 million (that's not a typo—it was million, not billion) that Obama pledged to save by cutting government expenses in 2009. Obama still has a chance to convince voters that he stands for something big, other than his controversial and legally troubled healthcare reform plan. But this may be one of his last opportunities to prove it before the politics of the presidential campaign take over. Bold ideas that seem intuitive to voters and can be put into place now would be winners.
Stop worrying about what Congress will approve. Obama has taken a passive approach to important legislation, challenging Congress to propose bills that he'll be willing to sign instead of sending his own bills to Capitol Hill. Aren't most Americans sick of this? Obama claims that his style is a pragmatic one meant to respect Congress's lawmaking prerogatives and focus on legislation that's likely to pass. But look at what really happens: Members of Congress propose all kinds of ridiculous bills that have no chance of passing anyway, confounding the whole electorate with their byzantine procedures and odious posturing. Obama likes to evoke Ronald Reagan, so for once maybe he should be Reaganesque and tell Congress exactly what he wants. Then let voters decide whether Congress ought to approve his plan or not.
Shun the word "infrastructure." And other wonky phrases that evoke government solutions. One solid idea for creating jobs is an "infrastructure bank" that would have government backing but would rely on private money—and businesslike decisions about how to spend it—to finance the construction and repair of roads, bridges, tunnels, and other byways. It could very well work. But Americans associate the word "infrastructure" with the controversial 2009 stimulus program, which the Obama administration vastly oversold, to its own detriment in the 2010 midterms. And Americans are more skeptical than ever of any program run by the government. Better for Obama to admit the '09 stimulus plan didn't work very well and emphasize new ways to kick private industry into gear, spur private hiring, and help businesses help themselves.
Adopt some ideas from the U.S. Chamber of Commerce. The chamber, one of big business's most effective lobbying groups, sometimes sounds like a mouthpiece of the Republican Party, especially in its aggressive opposition to any kind of healthcare reform. But the chamber also backs some sensible ideas for making American businesses more competitive and boosting hiring. Here are a few: Put a six-month limit on the time allowed for regulatory reviews of new business projects. Forgo federal regulatory reviews if the state has already done one. Designate a lead regulatory agency when more than one government entity has oversight of a project. Obama has already begun a thorough review of the federal government's sprawling regulatory apparatus. If he could identify significant ways to cut red tape—by 30 percent? 40 percent?—he'd earn some much-needed love from business leaders, who tend to view him as hostile despite billions in federal bailouts that kept big business afloat.
There's also growing support for lowering the corporate tax rate, while also cutting the number of loopholes and deductions that employ lots of lawyers and accountants but do little to make businesses more efficient. Obama could make that idea his own. Chamber of Commerce CEO Tom Donahue has also indicated that big business would support an increase in the 18.4-cents-per-gallon federal gas tax, as long as it was used to repair roads and highways. That signals growing awareness among business leaders that politicians need to put aside small-minded electoral concerns and do what's necessary to get America back on track. No politician wants to raise gas taxes, but Obama and business groups increasingly have common cause. A meaningful alliance between the White House and the business lobby would build confidence that somebody with clout is paying attention to the jobless problem.
Give small business a bear hug. Then do something big to help. Small businesses have gotten clobbered over the last several years as banks have cut off their credit, customers have fled, and new regulations such as healthcare reform have left them quivering. Since small businesses don't typically have a legal or regulatory affairs department, it takes more of their overhead (including the owners' time) to comply with regulations and fill out forms. The Obama administration has helped small businesses a little, by making more money available for government-backed loans. It could do more by finding a way to offer regulatory relief as well. Again, Obama would be most convincing if he proposed something big, like a suspension of certain types of regulations for a fixed period of time. There might be risks, but if Obama explained that it's a time for taking risks, he wouldn't get much pushback from Main Street.
Make energy jobs an urgent national priority. America is rich in coal, natural gas, and even oil. Almost always, there are important environmental concerns associated with new energy production. But it's also possible to put tough oversight in place that lowers the chance that energy companies will abuse natural resources. In a political deal with Republicans, Obama could open new areas to oil or gas drilling in exchange for big subsidies for the kind of long-term, green-energy programs he favors. He could issue new drilling permits that are temporary, with extensions contingent on a stellar safety record. He could also propose tougher penalties for violators in exchange for fast-tracking the permitting process for new energy projects. If Ronald Reagan could negotiate nuclear-arms reduction treaties with the Soviet Union—remember "trust but verify?"—then surely it's possible to negotiate safe-drilling deals with America's own oil companies.
Take on entitlement reform. Obama probably figured he could wait until a second term—if he got one—to take on the politically explosive issues of fixing Social Security, Medicare, and Medicaid. But circumstances have put entitlement reform on the table now. Politically, he could get away with kicking the problem down the road for another 18 months. The catch is that businesses and investors now see entitlement reform as the key issue that will determine whether they should have confidence in the government and the economy of the United States.
If Washington politicians find a way to corral the entitlement spending that threatens to bankrupt the government, it would boost confidence in America's ability to solve problems and remove one of the huge uncertainties that business leaders worry about. But if Washington dithers, confidence will continue to erode, there could be further downgrades of America's credit rating, and the ultimate cost of solving the problem will only go up. Businesses will never commit to hiring if they think America's leaders are dooming the country through neglect or cowardice. And that's what many of them think now.
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