Obama’s Jobs Plan May Include ‘Infrastructure Bank’
Business + Economy

Obama’s Jobs Plan May Include ‘Infrastructure Bank’

AP Photo/Nati Harnik

With only one week to go before President Obama details his plan to revitalize the stalling economy, Labor Secretary Hilda Solis vigorously defended the administration’s efforts to crank up hiring during a speech on Tuesday at the National Press Club. She stressed that Obama’s plan will include a payroll tax cut extension, an unemployment benefits extension, and the creation of a national infrastructure bank to rebuild roads and railroads with a mix of private and public funds. “There’s the potential of who knows how many millions of jobs,” Solis said.

But when asked about the firepower of Republican ideas to create jobs by reducing regulation, Solis was less sanguine. She told The Fiscal Times, “I haven’t heard anything significant that in my opinion is going to help us remedy this high rate of unemployment from Republicans.”

Solis also said on Tuesday, “This is a really tough recession and recovery. But we’ve added 2.4 million private sector jobs. That may seem small – and it needs to be higher, definitely – but people have to understand [that] when the President started his job, we had already lost to close to 4 million jobs … We are working really hard to make sure we increase opportunities for hiring, but people have to understand where we started.”

Despite the progress Solis noted, next week’s speech is weighted with significance for Obama as he heads into a tricky election season. He has a record low approval rating of  38 percent, fueled by public frustration with a sluggish economy marked by a weak labor market and an unemployment rate hovering around 9 percent. The business community is also disenchanted with the administration’s economic policies and was largely dismissive of  an Office of Management and Budget plan unveiled last week to roll back government rules. 

Next week could also be the President’s last chance to take control of the jobs conversation, as Republican GOP presidential contenders increasingly take their plans to the airwaves. Former Utah Gov. Jon Hunstman  will present his job creation plan tomorrow; former Massachusetts Gov. Mitt Romney will unveil his next week. Also next week, the GOP candidates will face off in their third presidential debate, which will likely center on jobs and the economy. 

Economic experts who have spoken with The Fiscal Times anticipate that tax reform and homeowner and mortgage relief programs will factor into Obama’s plans, too. “These are bipartisan ideas that ought to be the kind of proposals that everybody can get behind, no matter what your political affiliation might be,” he said yesterday in the Rose Garden.  

Although members of Congress on both sides of the aisle expect Obama to take a sweeping, large-scale approach to solving the country’s jobs crisis, lawmakers and interest groups remain divided on what particular path the White House should take. Many Democrats and labor groups argue the President should make a strong push for middle-class tax cuts and new stimulus spending and steer the discussion away from spending cuts and deficit reduction, which they say could deal another blow to the labor market and the economy. 

Obama needs to stop “nibbling around the edges,” AFL-CIO chief Richard Trumka told reporters last week as he lambasted the administration's economic policies. “History will judge him, and I think working people will judge him.”

Meanwhile, conservatives take issue with the liberal belief that fiscal stimulus is the proper medicine for the economy. John Makin, a resident scholar at the American Enterprise Institute, said Obama’s supposed economic stimulus plans could backfire in the form of higher taxes and deficits and a return to economic stagnation once the stimulus money dries up. “If enacted, these plans would add somewhere between $250 billion and $300 billion to next year’s budget deficit,” said Makin in a conference call with reporters on Tuesday. That, plus higher taxes, he said, would be too much of a “shock” for Congress. “You could get another few months of faster growth, but then you’ll have another problem later on as the measures wear off again,” he said.

Republicans in Congress also doubt the virtues of more stimulus and say deficit reduction and regulatory reform are the job drivers worth paying attention to. “This anti-business, hyper-regulatory, pro-tax agenda has fueled economic uncertainty and sent the message from the administration that ‘we want to make it harder to create jobs,’” added Makin.