The Obama White House has a problem. On the one hand, it wants and needs to take steps to improve the economy. On the other, it can’t do much without congressional approval, and House Republicans have made it abundantly clear they will not accept any measures intended to create jobs or boost economic growth.
In theory, this situation would call for some kind of bargain, but President Obama and his team have severely limited leverage — they just don’t have much of anything the congressional GOP wants. On the contrary, what Republicans appear to want more than anything is a weak economy in advance of Election Day 2012, which necessarily makes it tricky to offer them incentives.
There is, however, a vehicle, which the White House sees as an opportunity.
President Barack Obama is considering recommending that lawmakers on a deficit committee back new measures to stimulate the lagging economy, people familiar with White House discussions said Tuesday.
The plan Mr. Obama is considering also would recommend the congressional committee come up with a package that reduces the federal budget deficit by much more that its mandate of $1.5 trillion over the next decade, a senior administration official said, through changes in the tax code and social safety-net programs.
“There’s no reason to stop at $1.5 trillion,” the official said.
We don’t yet know if the Wall Street Journal article is reliable — other outlets haven’t reported anything similar — but for the sake of conversation, let’s assume it has merit. Indeed, it certainly makes a fair amount of sense, and the plan seems entirely plausible.
Here’s how this is playing out: the president and his team are putting together a new economic plan, which Obama has alluded to several times during his bus tour in the Midwest. The package will likely include both job-creation and deficit-reduction measures, and be presented before the Murray/Hensarling “Super Committee” holds its first meeting a month from now.
The details of the plan are reportedly still coming together, but it would presumably include measures that Republicans, at least traditionally, have either supported or found largely unobjectionable: the payroll tax break, unemployment insurance, an infrastructure bank, etc.
And why on earth would congressional Republicans even consider such ideas, instead of just laughing and throwing the Obama economic plan in the trash? Because, as the White House will pitch it, Democrats would be more amenable to a Super Committee debt-reduction package if it includes provisions intended to help the economy in the short term. The panel’s goal is to reach $1.5 trillion in debt reduction, but, the argument goes, that total could be even higher if the GOP cooperates on creating jobs.
If Republicans were at all serious about governing, I’d be more inclined to consider the viability of such a plan work. But they’re not. GOP lawmakers have already made clear they’ll refuse to help the economy, especially in the short term. They may be tempted by more debt reduction, but (a) Republican concern for the deficit is largely insincere; (b) undermining the economy appears to outweigh other factors; and (c) with the triggers, they’ll cut spending cuts anyway, even if the Murray/Hensarling panel achieves nothing.
That said, I’m glad the White House at least appears to be getting its priorities straight, putting the economy high on the to-do list and tying it to the debt-reduction efforts. Democrats on the “Super Committee” would be wise to do the same, focusing the upcoming discussions in the right direction.
