Having seen the early reports on the jobs package that President Barack Obama is expected to propose tonight in his speech before a joint session of Congress, it appears as if the chief executive will propose a $300 billion stimulus package, consisting almost entirely of familiar elements first seen in February 2009 with his $859 billion stimulus package. That program was supposed to reduce unemployment to below 8 percent. Tonight, among other things, he will call for an extension and expansion of the payroll tax cut currently in effect, yet another extension of unemployment benefits, and a public works construction package worth less than $50 billion.
There are things to be said for each of these proposals when viewed in isolation. Unemployment benefits, for example, temporarily tide people over in hard times. Payroll tax cuts help workers take home a bit more money — again, tiding them over in hard times. Infrastructure improvements can put in place tools — such as highways — needed for an economic expansion.
But these proposals also share several significant drawbacks.
First, each will add to Washington’s already record budget deficits at a time when Congress and the president are deeply involved in an epic battle over how much and where to reduce federal spending. Second, even under the best of circumstances, none of these policies will provide anything but slight and temporary short-term boosts. We have lived through the proof of this for the last two years, as the current 9.1 percent unemployment rate shows.
According to Reuters, Obama also plans to ask for higher taxes next week in order to finance this $300 billion package. If this is true, then the drawbacks of this plan far outweigh any claimed benefits.
Between Obama’s record budget deficits and extraordinary explosion of new federal regulations, the U.S. economy is suffocating. More red ink will only tighten Washington’s noose around America’s economic neck.
White House Press Secretary Jay Carney said Wednesday that the speech would include elements that have not been heard before, and we hope that these early news reports about Obama’s plans are incomplete. But if they aren’t, about the only way this approach makes sense is if Obama intends for Republicans to reject it, thus providing him with some imagined political benefit down the road.
After $859 billion in failed stimulus spending, America is broke and its economy is teetering on the edge of a second recession. If Obama won’t — or can’t — present a serious economic plan tonight, then his political skills have been badly overrated.