The public is beseeching Washington to create jobs, something a cash-strapped government pressed to cut spending is woefully ill-equipped to do.
In today's debt obsessed, tax averse, politically polarized climate, the things Congress can do to create jobs won't help much, and the things that would help, Congress can't do. There's a simple reason. Creating jobs costs money and Congress just agreed to cut $2.4 trillion in spending over the next decade.
Hamstrung on immediate job creation, President Barack Obama and Congress should turn their attention to laying the groundwork for the nation to compete and prosper in the decades to come.
People are hurting. Fourteen million Americans are looking for work, including 8 percent of New York workers who are unemployed. The recovery is stalled and prospects of a double-dip recession are growing. So first, Congress should do no harm.
It should continue for another year both the 2 percent payroll tax cut -- which puts about $1,000 in the pockets of those earning $50,000 a year -- and the federal unemployment compensation extensions that provide jobless benefits for up to 99 weeks. Each is due to expire at year's end. People will spend much of that money quickly, which is good for an economy crippled by a lack of demand for goods and services.
That won't quiet the clamor for an immediate game-changer on jobs. Unfortunately there isn't one to be had. So it's time to take the long view.
That should begin with the "super committee" created in the deal to raise the debt ceiling and charged with delivering a plan to cut deficits by $1.5 trillion over 10 years. That mandate -- and conditions favoring quick passage of whatever plan the 12 members agree on -- is an excellent opportunity to simplify the federal tax code for individuals and corporations by lowering rates and eliminating much of its $1.1 trillion worth of annual deductions, credits and loopholes.
Obama should drive this reform by putting a detailed plan of his own on the table.
His administration should also move quickly to write rules to implement the new law passed after the 2008 crisis to regulate the financial services industry. And it should accelerate and expand the initiative to pare unneeded or unwise regulations of all sorts.
Congress and Obama should also make the fairly modest changes to Social Security needed to ensure its solvency: raising the retirement age, for instance, pegging benefit increases to a different measure of inflation or raising the income ceiling on contributions. And they should take a scalpel to Medicare and Medicaid, to cut costs in the least debilitating ways possible. Each must be done, and sooner is better for the economy than later.
Tax and entitlement reform, along with cuts in defense and other discretionary spending already agreed to, would slash future deficits and put the government on a sustainable fiscal course. Together with regulatory certainty, that would go a long way toward eliminating concern about the future costs government will impose on businesses, the kind of costs that inhibit investment and job creation by corporations currently sitting on about $2 trillion in cash.
Using revenue generated by tax reform, Washington should invest in infrastructure and spur the alternative-energy market. That's a spending plan that's politically feasible.
Rebuilding the nation's bridges, dams, power grids, ports, levees, sewers, airports, roads and transit would create well- paying jobs and do work that needs doing. We should get to it. And pushing the nation to become more energy efficient and less dependent on fossil fuels -- by growing the market for flex-fuel vehicles, for instance, and retrofitting homes and schools to improve energy efficiency -- would aid national security while creating jobs.
Hobbled by deficits, debt, uncertainty and joblessness, what the nation needs is an agenda for economic growth, and it needs it now. hN