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Morning Jay: The Jobs Bill Won't Save Obama's Job

6:00 AM, Sep 14, 2011 • By JAY COST
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The president sure seems excited about his jobs bill, as he runs around the country like it’s a political game-changer. Liberals seem pretty jazzed about it, too. They all appear to think that this is just the tonic the White House needed: an obviously excellent proposal that will reveal congressional Republicans to be the atavistic obstructionists they are.

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Color me skeptical. In fact, I count four very good reasons why this jobs bill is not going to save the president’s job next year.

1. The bill can’t pass. I know the meme on the left is that the GOP is now so addicted to obstructionism that it can’t pass a sensible bill like this, even though it used to all the time, back in those halcyon days long gone when the two sides worked together to advance the liberal agenda.

Nonsense. When was the last time the Republican party agreed to nearly half a trillion in new tax hikes largely to fund Democratic client groups? Trick question – it’s never happened. It’s worth remembering as well that Bill Clinton proposed a much smaller, $16 billion stimulus in 1993 that was similar in form – and Senate Republicans filibustered it.

The Obama administration appears to think it can win the political argument even if it can’t actually get something substantive passed. But I’m not sure why the White House believes that. Two times in the last year the GOP House and President Obama have deadlocked, and two times both sides were hurt. Not equally – congressional job approval fell more sharply than Obama’s – but the president does not get to run against Congress on the ballot next year, and in all likelihood the GOP nominee will not come from the legislature.

2. It’s full of tax hikes. The conventional wisdom on these tax hikes is that they are broadly popular. All but the scrooges among us favor increasing taxes on millionaires and billionaires to fix our crumbling infrastructure and keep teachers in schools, right? I mean, goodness gracious, Warren Buffett pays less in taxes than his secretary! Can’t we fix that?! (Memo to Mr. Buffett: the Treasury Department takes donations.)

But if this narrative really holds true, why didn’t Democrats increase taxes on the wealthy at any point during the two years they controlled the Congress?

The answer has to do with framing the tax issue for the electorate. When media's pollsters frame the tax cut question in terms favorable to the Democratic party – e.g. by referencing the wealthy – it polls very well. But that is not the frame the GOP will use during the electoral campaign. Republicans will point to the aggregate amount of taxes – the shock value of “half a trillion in new taxes” can’t be underestimated – and they will mention the burden on small businesses.

If you think that the GOP can’t make hay about a $500 billion tax increase in this economic environment, then you haven’t been paying attention for the last thirty years.

This is similar to the good polling numbers for the “public option” during the health care debate. The media's polls used friendly buzzwords Democratic spinmeisters developed and – surprise, surprise! – found that they worked. But even for all those good numbers, party leaders still could not muster the votes in the Senate for it. And no wonder: After the Republicans and all the interest groups who opposed it had finished with their ad blitzes, the “public option” would have been like a curse word in the public mind.

3. It’s a stimulus rehash. Another framing device Republicans can and will use: The jobs bill brings back many of the old stimulus proposals.

Various and sundry tax credits, new unemployment insurance compensation, infrastructure spending, state government bailouts – all of this was in the 2009 proposal. One of the few new items is a tax cut for businesses that hire the unemployed, but Obama actually proposed something like this for the stimulus in January 2009 only to have congressional Democrats strike it because they didn’t think it would stimulate the economy.

The American Recovery and Reinvestment Act (ARRA) polls very poorly, which is why Democrats are no longer using the word “stimulus.” However, the overlap between the ARRA and the American Jobs Act is so great that the GOP nominee can easily tie the two together.

Picture yourself as a Republican ad man. Don’t you think you could have a field day with all this?

4. It plays to type. If John Kennedy had not been assassinated in November 1963, he likely would have been reelected by an overwhelming margin a year later. And he probably would have taken a hefty bite out of the traditional GOP base among upper income voters. 

One reason why was his 1963 proposal to cut income and business taxes. JFK wanted to stimulate the economy heading into the next election, and his advisors were split on how to do it. The liberals like John Kenneth Galbraith wanted infrastructure spending, while the conservatives like Douglas Dillon backed the tax cut. JFK sided with the conservatives and gave his famed speech to the New York Economic Club in December 1962, arguing:

The…best means of strengthening demand among consumers and business is to reduce the burden on private income and the deterrents to private initiative which are imposed by our present tax system — and this administration pledged itself last summer to an across-the-board, top-to-bottom cut in personal and corporate income taxes to be enacted and become effective in 1963.

Galbraith called it the most Republican speech ever given since McKinley. But it made political sense for JFK: Playing against the liberal type by proposing a business tax cut helped him advance into traditionally Republican strongholds.

Other presidents have done similar things. George W. Bush passed the Medicare prescription drug bill and No Child Left Behind during his first term; both initiatives were not really what you’d expect from a conservative Republican. In 1996, Bill Clinton agreed to a balanced budget and welfare reform. Again, not really what you’d expect.

But Obama is playing right into the stereotype of Democrats – that of a tax and spend liberal. Huge grants for infrastructure and state government financed by an enormous tax hike in the middle of a recession? The 2012 campaign ads write themselves! It’s almost as if the GOP has a mole in the White House secretly giving the president terrible advice.

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