April's jobs report is probably the best we've had since LehmanBrothers collapsed - the impressive numbers we saw in the spring of2010 were goosed by temporary census hires - but even the best jobsreport in years isn't nearly good enough.
We can add 244,000 jobs a month and not get back to pre-recession unemployment until 2016. We're still 7 million jobs belowwhere we were in November 2007. We have a long, long way to go. AndCongress is following the wrong map.
Lawmakers want to talk high deficits and weak dollars. They wantto argue over photographs of Osama bin Laden and funding for PlannedParenthood. But they've been studiously avoiding any action on theissue that dominated the 2010 election: jobs.
Over the past week, however, there have been some signs thatthings might be changing. Senate Republicans released a jobs agenda,and so too did House Democrats. It's the first time since theelection that the two parties have actually laid out their job-creation ideas. And it's . . . not encouraging.
First, note the authors. House Democrats. Senate Republicans. Inother words, the two minorities. House Republicans haven't proposeda jobs agenda, and neither have Senate Democrats, and nor has theObama administration. The powerful actors in the political systemare arguing about budget deficits. It's the powerless actors who aretalking about jobs.
And even that might be overstating the case. The SenateRepublicans' program has a lot less to do with jobs than with thesize of government and the size of deficits. In fact, the firstsection, "Living Within Our Means," doesn't even mention the word"jobs." It proposes a balanced-budget amendment, a spending cap and"immediate" and "substantial" spending cuts - all of which wouldcost jobs in the short term, even if you believe they'd help theeconomy in the long term.
As the International Monetary Fund concluded after looking at anarray of similar austerity efforts, "A fiscal consolidation equal to1 percent of GDP typically reduces GDP by about 0.5 percent withintwo years and raises the unemployment rate by about 0.3 percentagepoint."
There's much more in the Senate GOP's plan, of course. They wantto cut corporate taxes, get rid of regulations, reform worker re-training programs, ratify three pending free-trade agreements,increase both domestic drilling for oil and loan guarantees fornuclear power plants, and repeal the health-care law and replace itwith a handful of tweaks to the existing health-care system.
Some of those items are plausibly related to jobs. Most of them,however, seem curiously distant from the extraordinary condition ofthe labor market. They're either GOP perennials or they're responsesto the Obama administration's agenda. And they're mostly long-termpolicies. What about the here and now?
Republicans argue that by reducing "uncertainty" about futuredeficits and regulations, you free businesses up to invest now. Butthe uncertainty argument is internally problematic: Their balanced-budget amendment would force massive cuts to federal spending overthe next five years - cuts so deep that even the Paul Ryan budgetwould be ruled unconstitutionally profligate. It repeals the health-care law and begins from scratch. It creates a new regulatoryprocess in which Congress, rather than regulators, plays the leadrole on major rules. Even if all goes smoothly, that's a few yearsof utter turmoil in federal policy and programs. If uncertainty isthe problem, how can more uncertainty be the answer?
The House Democrats' plan is, at the least, more specificallyfocused on jobs programs. It makes large infrastructure investments,calls for a national manufacturing strategy, offers a variety ofinvestment-related tax cuts and pumps a lot of money into worker re-training.
It also relies on some unfortunately protectionist rhetoric - thename, "Make it in America," suggests our problem is competitionabroad rather than a financial crisis here at home - and itincludes, like the GOP plan, some seemingly random elements,including protection for derivative end-users and a new task forceto protect the Internet. Notably, it includes some points ofagreement with the Republican plan, like corporate tax reform.
What's perhaps most frustrating about these two plans, however,is how clearly they suggest a compromise that should, but won't,happen. The Democrats believe we need much more short-term stimulusand worker support. The Republicans believe we need long-termdeficit reduction. Those two goals, as economists have been pointingout for the past two years, are actually complementary.
We could have a single bill that supports the economy and thejobless now and cuts back on spending and raises taxes later. In onefell swoop, we could address weak demand, eroding skills andconcerns over future deficits. We could help workers whilereassuring investors, accelerating the economy in 2012 and slashingthe deficit in 2014. But we won't. The only people in Washington whoseem to care about jobs anymore are those who can't do anythingabout them.
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