Memo to Congressional Democrats: Coming off the special election in Massachusetts there is a newfound interest in doing something about jobs, but there is also a fear of alienating the all-important independent voters by increasing spending and therefore increasing the budget deficit. Here's the solution: A $400 billion jobs program! Let me explain.
Unemployment is a crisis in America. There are 27 million Americans unemployed or underemployed. That's the equivalent of the entire populations of 18 states (ME, ID, NE, WV, NM, NV, UT, KS, AR, NH, HI, RI, MT, DE, SD, AK, ND, VT) and the District of Columbia. Its not an earthquake, but it is a catastrophe of another sort -- an economic catastrophe. American lives are being lost and families and communities are being destroyed.
According to the Economic Policy Institute since the start of Bush's recession in 2007, we lost 8 million jobs. But because of population growth, creating 8 million new jobs wont get us back to the 4.9% unemployment rate that prevailed before the recession we need to create 10.6 million new jobs just to get there. Yet, in December 2009 alone we lost 85,000 more jobs.
Mark Zandi, of Economy.com predicts an unemployment rate of 10.6% in the third quarter of 2010 and he factors in the Economic Recovery Act and the homebuyers credit, which will have a positive impact. His forecast also assumes there will be a not yet legislated renewal of the unemployment insurance/COBRA package which will also help. Just ask Jon Corzine, Creigh Deeds and Martha Coakley what its like facing voters with unemployment numbers in that range. If thats the plan for 2010, I can tell you now, it's -- like too many Americans -- NOT WORKING.
According to economists, you can tinker with some small jobs bills, but it will not make an immediate difference. It will take an investment of about $400 billion in additional spending including UI/COBRA renewal -- to assure that unemployment would peak by spring or summer and start falling. If Congress does something so small it barely moves the jobs dial it would not only not be good for working families, it will represent another failure to deliver meaningful change.
So what should you do? SEIU, the AFL-CIO, EPI and others have laid out simple plans: (1) Expand fiscal relief to state and local governments to protect jobs and services; (2) Increase funding for UI, COBRA and nutrition assistance programs; (3) Invest in our crumbling infrastructure, rebuilding bridges, roads and schools and invest in our communications infrastructure and high speed rail and other public transit; (4) Invest in green jobs initiatives for energy efficiency and renewable energy (start with investments in retrofitting homes and commercial buildings); (5) direct lending of TARP money to small and medium businesses; (6) Invest in the public sector to create jobs that benefit communities short-term, large-scale job creation programs; (7) Provide temporary, wide-ranging tax credits for new job creation and (8) Expand and modernize job training programs to prepare workers for new and growing industries.
As for the Independent voters they need jobs too. I haven't seen any data anywhere that suggest that Independents are any better off than anyone else in this economy. Remember, candidate Obama won Independents by 52-44 in 2008 an 8 point margin according to the exit polls. He won Independents in CO by 10%, Independents in Florida by 7%, Independents in MI by 8%, in Nevada by 7%, in Ohio by 8% and Independents in PA by a whopping 19%, to name a few. And I searched through candidate Obama's stump speeches from 2008 and could barely find a mention of deficit reduction. Here's what he was emphasizing though in October of 2008 when Independents were breaking his way in big numbers:
We'll create two million new jobs by rebuilding our crumbling roads, and bridges, and schools, and by laying broadband lines to reach every corner of the country. And I will invest $15 billion a year in renewable sources of energy to create five million new energy jobs over the next decade - jobs that pay well and can't be outsourced; jobs building solar panels and wind turbines and a new electricity grid; jobs building the fuel-efficient cars of tomorrow, not in Japan or South Korea but here in the United States of America; jobs that will help us eliminate the oil we import from the Middle East in ten years and help save the planet in the bargain. That's how America can lead again.(Oct 27, 2008; Ohio)
In a Peter Hart survey for Change to Win, Independents selected unemployment and lack of jobs over deficit reduction by 46%-34% as the number one issue facing the country. And I can tell you from experience that a good number of those who choose deficit reduction do so because they believe they are paying too much in taxes right now and all they see is their money going to Wall Street and banks. To them, a deficit reduction question on a poll is a way of asking, Do you think you're paying too much and getting too little from your government. Once they see the money being used for programs that impact them and their families, so-called deficit reduction support goes way down. Indeed, Independents surveyed by Democracy Corps favor a jobs program that would increase the deficit 58% to 39% over a pure deficit reduction plan if forced to choose between the two.
Let's remember too, job creation is deficit reduction. In 2007 the deficit was just 1.2% of the GDP. The main reason we now have a huge deficit is because we are in a huge recession which drives down tax revenues and escalates safety net expenditures. The best way to bring the deficit down is to create jobs, put money in the hands of workers which allows them to pay taxes and buy products. Expanding and growing the economy through job creation is the best way to get the deficit dramatically lower.
Finally, act fast. You debated health care reform for a year and it still hasn't passed. For most Americans who are still employed, if they worked on a project at their job for a year and hadn't made any progress at all they'd probably be fired. So, unless you change what you are doing fast, don't be surprised if they want to "fire you" in 2010.
It's time to get on with that Obama program from 2008. It's good for the economy and good politics. Base Democratic voters and Independents turned out to vote in record numbers for that program in 2008. If Independents are moving away from you and Democratic base voters aren't energized it's not because as some say, you are doing too much. It is because they think you are doing too little. In a Hart Research post-election poll in Massachusetts for the AFL-CIO, 47% of voters said they were more concerned that Democrats haven't made needed change compared to only 32% who said they were making too many changes too quickly. The electorate voted for change in '08, they did it again in '09 and January '10 (or stayed home) and they will do it again in November of 2010. They will keep voting for change or staying home -- until they see some real differences in their lives.