Here’s a starter list of possible "grand bargains" for the politicians who spent the bulk of their summer arguing about everything but how to get America’s 14 million unemployed back to work.
Open and improve trade. Republicans get swift passage of pending free-trade agreements with South Korea, Panama, and Colombia, and Democrats get a law authorizing the Obama administration to retaliate against China for suppressing the value of its currency. Leveling the currency playing field would likely boost U.S. exports to China, and the total package of freer, fairer trade could support more than 2 million new jobs, according to cumulative calculations from the U.S. Chamber of Commerce and the Economic Policy Institute.
Stabilize the housing market. President Obama and Republicans could agree to take steps to shuttle the most-troubled homeowners—the ones who borrowed beyond their means—out of their houses and into rental units as fast as possible. For people who could afford to stay in their homes if they found jobs, the government could set up a sort of bridge-loan program to stave off foreclosure—money to cover mortgage payments for a year or two, until the economy improves and the borrower finds a job and pays back the money.
Drill, responsibly, drill. After the BP spill in the Gulf of Mexico, permits for Gulf drilling slowed and, with them, job-creation potential. Now that the Interior Department has completed its safety review and is seeking to hire more regulators and implement stricter drilling standards, Obama should turn up the heat to fast-track drilling permits as much as the oversight infrastructure allows.
Welcome a new wave of immigrants. A persuasive body of economic research suggests that one of the easiest ways to boost consumer demand would be to allow a couple of million additional consumers into the United States. A flood of immigrants would boost growth; economists who have studied immigration and its economic impact suggest that the newcomers wouldn’t drive down wages or employment for everyone else.
Unleash energy companies’ spending power. One of the easiest ways to shore up certainty for utilities would be a mandate that a certain percentage of each utility’s power generation come from low-carbon-emission sources. Such a federal mandate could provide a clear signal to the private sector to invest in wind, solar, or any of the other technologies. Several large utilities say that the resulting certainty would spur billions of dollars of investment and drive job growth.
Explore other deals. Obama and Republicans could seek common ground elsewhere, too: freezing or repealing some federal regulations; enacting German-style labor laws to encourage job-sharing, in which businesses keep workers on the payroll but reduce hours across the company to prevent layoffs; and extending payroll-tax cuts or enacting new measures designed to encourage businesses to hire the long-term unemployed. Lawmakers should look for more ways to boost exports, to unleash corporate investment, and to unlock credit for start-ups.