by Randolph T. Holhut
Chief of AR Correspondents
September 15, 2011
FOR OBAMA AND DEMOCRATS, TIME'S RUNNING OUT
DUMMERSTON, Vt. -- Before a Joint Session of Congress on Sept. 8, President Obama laid out a $447-billion package of tax cuts and new government spending to help stimulate the economy and create new jobs.
It's better than nothing, but the President's plan, the American Jobs Act of 2011, is still too little, too late.
Mr. Obama proposed proposed extending unemployment insurance at a cost of $49 billion, repairs and renovations to 35,000 aging school buildings for $30 billion, and $50 billion in transportation infrastructure projects.
But this plan makes the same mistake as the 2009 stimulus, and that is having tax breaks make up the bulk of the relief package. Obama proposes $240 billion in tax relief by cutting payroll taxes for employees in half next year, and trimming employer payroll taxes as well.
Politically, he's trying to please conservatives by backing cuts to Medicare and Medicaid spending, while trying to please progressives by seeking a modest tax increase on the wealthiest Americans. He's also seeking the ratification of trade agreements with South Korea, Colombia and Panama.
And while the President was forceful in making his case for this proposal, one can't be optimistic about the chances of its passage, not unless the Republicans in Congress have finally decided that its more important to deal with the worst long-term unemployment rates in decades than trying to ensure that Mr. Obama is a one-term president.
Some Democrats believe President Obama missed his chance for a second round of stimulus in the last Congress, when Democrats had a solid majority in the House and a larger majority in the Senate. Now, the best he can hope for is the enactment of this modest little plan that will do little to address a huge problem.
The U.S. economy added zero new jobs in August, when it needs to add a minimum of 150,000 jobs a month just to keep up with population growth. There are still nearly 25 million Americans who are either unemployed or are working part-time but seeking full-time work. The official unemployment rate stands at 9.1 percent, and the White House is predicting the rate will not fall below 6 percent until 2017.
Presidents seeking re-election when the unemployment rate is above 9 percent have almost never won at the polls. The only President that did was Franklin D. Roosevelt in 1936, and that's because the unemployment rate was nearly 25 percent when he was elected in 1932.
Mr. Obama is the danger zone right now. According to figures released by the U.S. Census Bureau this week, 46.2 million Americans, about 15 percent, lived below the poverty line in 2010 - defined as $22,314 for a family of four. That's the highest percentage since 1993, and the highest overall number of people in poverty in the 52 years the bureau has tracking this figure.
Median household incomes fell last year to levels last seen in 1997. According to the Census figures, the median annual income for a male full-time, year-round worker in 2010 - $47,715 - was virtually unchanged, in 2010 dollars, from its level in 1973, when it was $49,065. It was the first time since the Great Depression that median household income, adjusted for inflation, had not risen over such a long period.
And poverty is hitting our children hard. About 16.4 million U.S. children - or 22 percent - live below the poverty line, the highest overall numbers since 1962 and the highest percentage since 1993. This backs up the Organization for Economic Cooperation and Development's data, which shows the United States now has both the highest overall poverty rate and the highest childhood poverty rate of any major industrialized country on Earth.
Is this all Obama's fault? No. There is more than enough blame to go around.
But Obama can't cop out and say that this is the best he can hope for in a hyper-polarized political environment. Nor can he assume that he will be re-elected because the opposition party is worse. Obama and the Democrats have to do something, and there are no more excuses.
How about this suggestion: The rich and their corporations in the United States are sitting on a $2-trillion cash hoard. They have taken advantage of $1 trillion in free bank reserves, courtesy of the Federal Reserve. They hold $1.2-trillion in offshore subsidiaries, and have more than $6 trillion squirreled away in tax havens around the world.
When you hear politicians talk about how we can't afford to have another Works Progress Administration or Civilian Conservation Corps to rebuild our frayed public infrastructure, think of these numbers. A fraction of that cash stash could put millions back to work and transform our nation by reviving these New Deal-era programs.
It is clear that more public spending is needed, and is supported by a majority of Americans. Despite the noise made by the anti-tax, anti-government and anti-progress Tea Party folks, poll after poll shows substantial support for higher taxes on the wealthy, bigger cuts in defense spending, more spending on health care and education, and for preserving Social Security.
Yet none of these things will happen, because too many of our politicians are thinking too much about how to give more money to the haves, instead of rebuilding our economy to benefit the have-nots.
You can see why so many Americans are disgusted right now. They are sick of inaction in Washington, and they are sick of being ignored by their elected officials. If Obama and the Democrats don't do something substantive and real about the growing numbers of the impoverished and unemployed, they will looking for new jobs next November.
Chief Correspondent Randolph T. Holhut has been a journalist in New England for more than 30 years. He edited "The George Seldes Reader" (Barricade Books). He can be reached at email@example.com.