After a year of embracing austerity economics—emphasizing cutting spending and government over creating new jobs—Barack Obama belatedly tried to change the conversation with his big jobs speech Thursday night.
The introduction of the “American Jobs Act” was both a policy and rhetorical shift from the administration, away from the above the fray “most reasonable man in the room” strategy aimed at a narrow sliver of independent voters and toward a more aggressive, feistier Obama, one who is not afraid to run against the do-nothing Congress, take his case directly to the American people and ruffle a few feathers. It’s the Obama, quite frankly, that many of his supporters have been waiting quite some time to see.
That’s not to say everything about the speech or his plan was perfect.
Is the $450 billion legislation—an extension of unemployment benefits, an extension of the payroll tax cut, repairing schools and crumbling infrastructure, rehiring teachers and first responders, job training for the long-term unemployed, a tax cut for companies that hire new workers—big enough to spur a true economic recovery? Probably not. Half of it is tax cuts. Ezra Klein tweeted that “White house believes this plan would add one to two percentage points to GDP growth next year.” But Harvard economist Jeffrey Liebman, a former Obama adviser, says “we need real GDP to grow at 4.5 percent a year for two years to bring the unemployment rate below 7 percent.” So even if Obama’s entire plan passed as is, there would still be more to do.
Will Obama’s to-be-determined deficit speech undermine the momentum from his jobs speech? Perhaps. The president left open the possibility for significant changes to Medicare and Medicaid, which won’t be popular with many Americans. The super-committee still has the power in Washington. Once its deadline nears, the conversation may once again revolve around deficits instead of jobs, especially since there’s no built-in incentive forcing the committee to focus on jobs, as compared to the triggered spending cuts.
But for now, Obama’s speech was an important first step in changing the conversation and defining the debate on his own terms. I particularly liked the section where he invoked Abraham Lincoln to argue for the essential role of government in America. Think of it as the president’s long-awaited reply to the Tea Party. Said Obama: