An Informed and Bold Alternative to Obama Jobs Plan

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July 12, 2011; Source: Robert Reich (blog) | While the NPQ Newswire doesn't typically reproduce commentary on social policies for their own sake, we do reference articles on social policies in which nonprofits have a big stake.  Many NPQ readers work with nonprofits that are engaged in job creation and job retention programs. Sometimes the experts who are increasingly frustrated with the prolonged jobless (or less-jobs) recession weigh in with criticisms of President Obama, though on occasion they forget the role of the nonprofit sector, such as former president Bill Clinton's recent job prescriptions that so unnerved President Obama's aides. 

Now comes former Secretary of Labor Robert Reich, who used his blog to eviscerate the president's response to the horrendous June job numbers (only 18,000 new jobs with official unemployment rising to 9.2 percent, prevented from rising even more because 270,000 people dropped out of the labor force entirely).  Reich titled his blog posting, "The President's Jobs Plan (Not)."

In place of the president's "inadequate" proposals, including extending the temporary reduction in the employee part of the payroll tax, approving pending free trade agreements, and, according to Reich (we missed this one), streamlining patent procedures, Reich proposed specific alternatives constituting a jobs plan that will "get Americans  back to work" with these elements:

1.  "Exempt the first $20,000 of income from payroll taxes for the next two years. This will put cash directly into American’s pockets and boost consumer spending."

2.  "Recreate the WPA and Civilian Conservation Corps – two of the most successful job innovations of the New Deal – and put people back to work directly. The long-term unemployed will help rebuild our roads and bridges, ports and levees, and provide needed services in our schools and hospitals. Young people who can’t find jobs will reclaim and improve our national parklands, restore urban parks and public spaces, recycle products and materials, and insulate public buildings and homes."

3.  "Enlarge the Earned Income Tax Credit so lower-income Americans have more purchasing power."

4.  "Lend money to cash-strapped state and local governments so they can rehire teachers, fire fighters, police officers, and others who provide needed public services."

5. "Extend unemployment benefits to millions of Americans who have lost part-time jobs. They’ll get partial benefits proportional to the time they put in on the job."

(Reich adds another item that deals with homeowners being able to declare bankruptcy on their primary residence, which seems less directly focused on job creation). 

What is the nonprofit angle?  One angle is that lending money to state and local governments to provide public services can and should include funding for nonprofit service providers that have been slammed by state budget crises. One might guess that nonprofit service providers are within Reich's recommendation.

The other nonprofit piece is Reich's proposal to create a new version of the WPA or CCC. Unlike the 1930s, there is now an infrastructure of nonprofits that would be ready made to create WPA- or CCC-like job-creating opportunities. "Re-creating" the WPA or CCC would  tap the investment that the nonprofit sector has made in supplementing the capacity of government. 

All of Reich's proposals more or less require spending. They will not be achieved by budget-cutting. That's what stands Reich in opposition to the tepid jobs agenda of President Obama, who seems to be acceding to Republican calls for budget cuts without comparable increases in tax revenues. If the agenda is to put people back to work, as the economy continues to founder and greater-than-nine-percent joblessness starts to look structural rather than temporary, the nation is going to have to spend money. 

With stinging critiques recently from Clinton, Al Gore, and now Reich, President Obama's entourage is probably bristling.—Rick Cohen

  • Kelly Kleiman

    Reich’s plan looks great, and I too am annoyed by the President’s apparent willingness to discuss the deficit as if it really mattered (which it does politically but not economically); but there is no hope in hell that Reich’s plan, or even Clinton’s far more conservative plan, will make it through the Congress. What, exactly, is gained by proposing prescriptions that can’t be enacted?

  • Bill Shander

    Kelly, you’re absolutely right – pundits who propose plans that are clearly not feasible in the current political climate, regardless of how bold they may be, aren’t helping the situation. How about a suggestion for tactics to get a real deal done now? Then a long-term bolder suggestion that would be feasible over the coming X months/years? That would be far more helpful.

  • rick cohen

    Kelly and Bill: I’m not sure I agree. I think pushing the envelope is necessary to get the White House to remember what it should be fighting for. I’ve been surprised to see how quickly the White House has bought into prescriptions that simply don’t work, can’t work because of their blatant insufficiency. You[‘re right, Bill, that we need to also talk about tactics for getting a deal done as well. But progressives need to take back the definition of the debate. When the likes of Eric Cantor and Michelle Bachmann get to define the public’s understanding of the issues, whether jobs or deficit, we’re in trouble. So some of the “plans” may be to shift the public’s frame of reference (just as the Republicans, other than the likes of Bachmann, know quite well that they can’t and won’t let the U.S. self-immolate by failing to raise the debt ceiling).