President Obama’s $300 billion jobs package is unlikely to be large enough for Democrats, bold enough for independents, or palatable to Republicans, even though a broad consensus exists on the basic sense of its policies. That means that it might not create a single job, no matter how well-crafted it is.
If parts of the plan do pass Congress, they’re not likely to do so without acquiring the sort of baggage that has attached itself to every major successful Obama initiative, from his first stimulus to his health care plan to his negotiated payroll-tax cut at the end of last year. What’s in this baggage is proving absolutely toxic to the administration -- the EPA would investigate, but the baggage handlers would complain about excessive regulation.
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Take what we know about the plan so far: Aid to state and local governments would by far be the most stimulative action, but since that would lead directly to an expansion of government payrolls, it doesn't have a prayer of passing the House. Another is direct government payments to the unemployed, serially unpopular with Republicans unless it's somehow offset by unspecified cuts elsewhere. An infrastructure bank is a maybe, if business starts to lean on its Republican allies. Business deductions and an extension of the payroll-tax cut are hard to oppose if their bills are sent up individually.
When he ran for president, Obama was very much in sync with the American people. They wanted a break from the past – from the Bush era -- and the young U.S. senator from Illinois was the biggest change agent available. They still want change – even more so, especially since the economy turned out to be under deeper duress than almost anyone supposed.
But Obama hasn’t changed with the times. His focus, since the beginning of his presidency, on reasonable compromise and rational debate, has been unwavering, and he's accomplished some major policy goals by sacrificing political leverage.
Take health care. The assumption was, yes, the process was messy, but the accomplishment would speak for itself and after a while the president’s face would flicker in the halo of satisfaction that would build itself around the accomplishment. Instead, liberals complained that the bill did nothing and wouldn’t accomplish what it set out to do. Republicans, en masse, began a judicial, legislative, and communications effort to undermine it. One guy with a megaphone walking in the middle of all of this is simply not going to change how people perceive health care, even if he is Barack Obama. It’s not that the president is shrinking or looks small; it’s that the presidency can’t function in this environment.
Obama hasn’t picked fights for the sake of picking fights. He’s wanted to get things done. Right now, though, the economy is simply too damaged and the Republican Party too united for anything to pass Congress and catalyze private-sector job growth. Further, to the White House, the business community seems more keen to conspire to bring Republicans back to power instead of acting in their own interest when it comes to specific proposals like an infrastructure bank.
Businesses are very sensitive to the regulatory and rhetorical environment in Washington. Although Obama spent time trying to build relationships with larger stakeholders, he was less sensitive to the tone that was emanating from his administration about what creating a job actually entails. It is one thing to propose tighter regulations when the economy is relatively flush; it is quite enough to even so much as tinker with them when cost-conscious companies are making decisions about the future in a present where Americans aren’t spending, the health care system will radically change, and debt continues to grow, imperiling the ease of credit.
Obama has mused in several private settings that if he loses re-election, it won’t be because a Republican beat him: It will be because the economy was impervious to his attempts to revive it. That may be so. But it might also be true that Obama will be beaten because he allowed himself to be consumed by an impossible goal – changing Washington – instead of focusing on a reasonable one: using the power of the presidency to make Washington work for him.
One approach Obama hasn’t tried, but is turning toward, is ruthlessness. If Congress fails to pass the jobs bill, you might see Obama take a single job-creating idea, announce it somewhere outside of Washington, and give Congress three weeks to consider it. Then do it again. And again. And again.
This article appears in the September 7, 2011, edition of National Journal Daily PM Update.