In the wake of an alarmingly weak jobs report last week, President Obama and lawmakers in both parties find themselves possessing few if any realistic options for jolting the economy out of its doldrums before Election Day.
Big-ticket items like payroll-tax cuts, free-trade agreements, months of extended unemployment benefits and “stimulus” spending on public works and aid to states and local governments have been tried but have failed to spur a sustained, robust recovery.
Mr. Obama’s $830 billion stimulus bill — a third of it tax cuts — enacted when he took office has pretty much run out, its impact the subject of heated debate on the campaign trail. At its peak in 2010, the stimulus measure accounted for at least 1 million jobs — and perhaps as many as 5 million — according to the Congressional Budget Office.
Many of those jobs, particularly in state and local government, have since disappeared. Republicans, empowered by midterm election returns two years ago, now scoff at Mr. Obama’s suggestion for another round of stimulus government spending.
Mr. Obama’s remaining “to-do list” for Congress contains a partial tax credit for new hires, extending tax breaks about to expire, renewing highway and mass transit construction programs and preventing interest rates on student loans from doubling. Even combined, they hold little promise of lifting a $15 trillion economy from its torpor.
What’s missing are proposals to try to boost consumer demand — like a new round of tax cuts for individuals — or another set of big-spending “stimulus” proposals to pump federal dollars into the economy.
The “president is continuing to work with his team on potential new ideas” to jump-start the economy, White House spokesman Jay Carney said Monday when pressed about the sagging rate of job growth.
The reality is the ideas coming from Mr. Obama are likely be the ones he has already proposed. There is no money and no political appetite for bolder ideas. And the White House has no confidence that Republicans in Congress would help him muscle through even smaller economic measures for fear it might be seen as helping his standing with voters.
Congress did enact a major chunk of Mr. Obama’s jobs proposal last winter, extending unemployment benefits for the long-term jobless and a 2-percentage- point cut in the Social Security payroll tax.
Despite costing $150 billion, the package didn’t provide any new stimulus for the economy since it prevented existing policies from expiring rather than establishing new ones.
Lawmakers in both parties pretty much ignored Mr. Obama’s call to make the payroll-tax cut more generous and extend it to businesses.
Please read our comment policy before commenting.