President Obama is set to unveil a major jobs plan after his vacation in Martha’s Vineyard that may be similar to the stimulus package that was passed in 2009.
With the poor economic data and the attacks from his left flank, Obama is being pushed into adopting some kind of long-term strategy to both improve the country’s bad and perhaps worsening economic condition as well as provide a boost to his staunchest liberal supporters.
David Axelrod, Obama’s chief campaign strategist, was interviewed by CNN this Sunday to address the current lack of a jobs and deficit-reduction strategy for the President and the Democratic Party. He mentioned that Obama could unveil a major plan after Labor Day that may be similar to the stimulus package that was passed in 2009.
CNN anchor Candy Crowley asked Axelrod, “So you are trying to do deficit reduction and stimulus at the same time, is that a hard sell?” He answered by repeating the same meme that Obama has been pushing all along, that the country needs a “balanced approach.”
According to Axelrod, unanticipated events such as the Arab Spring, Japanese tsunami and European economic crisis necessitate “additional steps to be taken in the short run, and everyone should be able to agree on that.” He then mentioned the steps that he believes everyone can agree on, “education, research and development, and, yes, rebuilding our basic roads, bridges, railways, waterways, things that we need to move our goods across this country.”
The only thing that prevents these initiatives from coming to be is “pure politics,” according to Axelrod.
When Crowley suggested that the intended proposal might just be Obama playing politics by proposing legislation that Republicans in the House can’t agree on, Axelrod essentially validated that claim by saying, “There’s nothing in there that reasonable people shouldn’t be able to agree on.”
So opposing a massive spending binge with no plans for deficit reduction in a nation with dangerously high amounts of debt would be, according to Obama’s chief strategist, unreasonable.
So to jump-start the economy, Obama will most likely use a demand-side, Keynesian approach that will focus on a variety of public works projects. Of course, if the administration wishes to keep entirely with Keynesian theory, it will also have to reduce taxes.
The only tax cut that Axelrod suggested might happen is a “payroll tax cut for middle-class Americans.”
The payroll tax cut would most likely be just an extension of the payroll tax cut already in effect, and would be a renewal of the already existing cut.
Ryan said of temporary payroll tax cuts, “We’ve sort of proven this already, a number of times. Temporary tax rebates don’t work to create economic growth. Permanent tax changes do.”
Given the state of U.S. finances, the increase in spending will necessitate a massive amount of borrowing and an increase in the deficit which, will be exactly in line with the first stimulus package.
This economic approach will help calm down his most fervent backers, who have been eagerly, and now angrily, awaiting more funds for their prized constituencies.
Rep. Maxine Waters (D.-Calif.) has been particularly active lately, railing against the President for not remembering who got him elected.
While he was on his Midwest bus tour, Waters said at a Congressional Black Caucus (CBC) meeting, “We’re supportive of the President, but we’re getting tired. We’re getting tired. So, what we want to do is, we want to give the President every opportunity to show what he can do and what he’s prepared to lead on.”
Lamenting Obama’s lack of time in black communities, Waters said, “Our people are hurting.”
In continuing her blitz, Waters targeted what she believes is the greatest obstacle to her constituencies receiving funds from the government, and that would be the Tea Party.
She demonstrated civility on a stop of the CBC’s For the People Jobs Initiative by saying to a group of assorted supporters and purple-shirted Service Employees International Union members, “As far as I’m concerned, the Tea Party can go straight to hell.”
So President Obama, who has come under intense fire for his extended trip to Martha’s Vineyard in a time of deep economic uncertainty, will have to return with a speech that addresses the concerns of the country and his party loyalists. The plan will likely have to serve both his economic belief in Keynesianism and his political need to fire up his supporters.