Let's discuss the second point first: the debt committee. Quite a lot was said after the debt deal about the scale of the cuts and the draconian 'triggers' that would kick in if the debt committee didn't reach agreement on yet another round of spending cuts this fall. But that commentary missed the key element of how the deal was structured. None of the draconian trigger cuts actually go into effect until early 2013. And the amount of actual cuts in 2011 and 2012 are extremely small -- almost trivial when compared to the scale of actual federal budget. So if the conferees can't agree this fall on a debt deal, does the axe drop on Medicare and Social Security? No, it doesn't. Nothing happens until 2013 -- that is, after the 2012 election. That would make the 2012 election a referendum on upper income tax cuts versus draconian cuts to Medicare and Social Security -- a debate Republicans fear and Democrats should welcome.
Then there's the jobs front. Unemployment rate remains today at 9.1%, the persistence of which should not blind us to the catastrophic level of joblessness it signifies. The White House itself says it expects unemployment to average 9% through 2012. So no relief for the jobless or the president through election year. Those are catastrophic numbers. Given that they've basically been in place for almost three years the president is lucky to have levels of job support as high as he has, even though most Americans still blame George W. Bush rather than him for the economic crisis itself.
It is a given that House Republicans will not willingly pass anything over the next year to create jobs. They have even resisted tax cuts to do so, which settles the question of good faith on the issue. The White House is in a tough position because the public as a whole has soured significantly over the last three years on the proposition of a government role in pulling the country out of recession -- a fact progressives have been very reluctant to recognize. But the president needs an argument about jobs to campaign on, even if he can't get one passed. And to that end, the policy and political logics are identical. He needs to propose a real agenda on jobs that he can press from now until next November. What he proposes will almost certainly include a continuation of the payroll tax holiday that Republicans have heretofore refused to continue. And that will have some stimulative effect. But it is hard to imagine that will amount to much in itself, either economically or politically.
It's necessary to reiterate the point. There's no point in trying to find a plan for job creation that Republicans will support since they'll oppose any plan the president comes up with. The limitation on the president's plan should be the reality of anti-government turn of public opinion not the prospect of willing cooperation from his Republican foes.
This isn't my thought. It's what they were saying inside the White House after the debt deal/downgrade debacle.
Coming out of the debt deal the strategy inside the White House was to come back in early September proposing a mix of relatively small bore jobs initiatives (payroll tax holiday, etc.) and keep daring the Republicans to pass them until November 2012. On the debt front, drive a hardline with Republicans on the super committee. If they won't consent to any new taxes, let the triggers kick in and take the whole thing to the people on the 2012 ballot.
That was the plan. I'm curious to see whether they'll actually do it.