2012 and the Obama jobs reboot

Letter from America

By Graham Copp / @graham_copp

When President Obama addresses a joint session of Congress tomorrow with a major new economic plan, it will likely set the terms of the 2012 Presidential and Congressional elections.

These are tough times for the once near universally popular president and, perhaps for the first time, some are openly questioning whether he can win re-election. With approval ratings languishing in the low 40s and unemployment figures stubbornly high, Obama is vulnerable.

With more than a year to go until the election, it would be foolish to pay too much heed to the more hysterical talking heads on cable TV. But the President will have to do a good job of better defining the political discourse over the next fourteen months or his re-election chances will suffer.

Jobs and employment are the key battleground.

So far, the Republican strategy has been brilliant. They have sought to frustrate every single initiative of the President and the Democratic Party. From healthcare, to protecting tax cuts for billionaires, to saving the auto-industry, they have managed to delay and obstruct. There are even government agencies without leadership and a record number of vacancies on the federal bench because Republicans have blocked appointment of agency directors and judges.

The game is pretty simple. Republicans use their majority in the House of Representatives and their blocking minority in the Senate to stop any progress. What eventually emerges is so mired in the process and so watered down, that Democrats have little to cheer about. Meanwhile, Republicans can point to the huge concessions they get on anything that gets passage as a victory, and if the reputation of government’s ability to deliver suffers, then the party of small government wins.

The ironic thing is that the positions Republicans take are often deeply unpopular. But because they take coherent, easily understandable positions, they run rings around the ideologically diverse Democrats, who cannot or will not express their position in a unified way.

The core principles of the Republican Party are easy to grasp – low taxes, small government and religiosity. It is hard to say what the Democrats, whose base and politicians are politically and demographically more diverse, stand for. And every time President Obama goes into a political fight with the Republicans and loses, it weakens his public standing and demoralises his supporters.

But here is the chance for the future, and it is why the Presidential address this week will be so important.

The number one priority with the American public right now is the creation of jobs. A New York Times/CBS news poll in June found that “Economy/Jobs” was the number one priority for 53 per cent of people. The Republican priority of cutting the deficit came top for only seven per cent of people.

No major poll that I’m aware in recent times has found job creation as anything other than a runaway first priority in US politics. So when president Obama unveils his new economic stimulus plan on Thursday, he has a big chance to define the politics of the number one issue.

The debate has been whether he should try and find something that Republicans can support – which would probably be mostly based on tax cuts for new hires and similar incentives to boost hiring, or whether he accepts that a lack of demand in the system is the problem, and takes the “go big or go home” approach. That would mean unveiling a big package of new infrastructure spending, combined with hiring incentives, which would boost employment and put spending cash in more people’s pockets. He would lay out his vision and then put the ball in the Republican controlled House of Representatives’ court to pass it or, more likely, have to explain why they refuse.

The signs from the President’s Labor Day speech, in front of an audience of union members in Detroit, in which he highlighted the success of the government rescue for the car industry, are that he’s heading towards going big. Today, White House sources are trailing a figure of 0 billion in infrastructure, job creation and unemployment benefit extensions.

If he takes the “go big” approach, then his challenge will be to explain it in easy to grasp concepts. People need to understand what local impact they will see. There is little support for something that sounds like just another big government cash splurge, but if it is something that will repair the local bridge, fix the potholes in the highways, bring fast broadband internet to a particular rural town or village, then it has a great support. Not only is it good policy to invest in infrastructure, but also it is a political dare to swing-district republicans to see whether they would reject specific local projects in their home town.

Winning the battle to define job creation is crucial. While Republicans in Congress are far more unpopular than the President, the latest Washington Post poll has found that the public trust them as well as they trust the President on job creation. Years of high unemployment and months of presidential cave-ins and muddled messaging in which priorities remain unclear, have left voters with little trust in the President’s policies. That is why the reboot on jobs in so important politically as well as economically.

So the jobs agenda popular, but on tax and spend issues, the public is with the progressive left. Certain targeted tax increases are hugely popular, while budget cuts on popular public services are the electoral equivalent of halitosis and body odour – the voters say stay away.

A recent NBC/WSJ poll found 81% support for increased taxes on those who earn a million dollars a year or more. 74% supported eliminating tax credits for the oil and gas industries, while Republican favourites such as cutting Social Security was supported by only 22% as were education cuts. Many Republicans who voted for cuts on popular government programmes as part of Rep. Paul Ryan’s budget plan, have stopped holding public meetings in their districts for fear of the reaction from their constituents.

So as the long US election campaign begins, Republicans will try to define job creation as something that will only happen if government gets off the backs of companies. They will argue that rolling back the state helps build jobs. And they will stick together and fight like crazy to win that battle. But if Obama holds firm and shows how the Government can create jobs, he can fight the election on his own terms and go on to win the second term that the country needs.