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Obama's Jobs/Deficit Plan: Can It Avert Deadlock?

Obama's Jobs/Deficit Plan: Can It Avert Deadlock?

By Alexis Simendinger - August 18, 2011

President Obama will present a job-creation plan to Congress after Labor Day and challenge Republicans to compromise with Democrats to put Americans back to work, arguing that conservatives have overlooked the struggling middle class by concentrating their economic remedies on lower taxes for wealthy individuals and corporations.

Democratic sources in the administration and on Capitol Hill said Wednesday that the details of the president’s newest plan to try to reduce the 9.1 percent unemployment rate are still being developed in the weeks leading up to Congress’ return from its month-long summer recess.

Sources suggest that the president’s jobs plan, to be outlined in a speech after Labor Day, will be a mix of familiar and new ideas to promote hiring -- paired with a separate set of proposals for long-term deficit reduction that he will encourage the 12-member congressional “super committee” to embrace as it seeks an agreement by Thanksgiving to lower deficits by at least another $1.2 trillion over a decade.

Having already enacted $1 trillion in spending cuts as part of the August debt ceiling deal, Obama intends in September to renew his call for something akin to a $4 trillion “grand bargain” in streamlined government. He and House Speaker John Boehner flirted with a mix of spending cuts and revenue changes of that size in July, but Boehner could not sell an $800 billion mix of tax loophole closures and revenue changes to his caucus before the Aug. 2 default deadline.

The newly formed “super committee” presents openings to battle once again over taxes and spending, and many Washington observers predict the panel will deadlock. If it does, the punishment for congressional inaction is supposed to be across-the-board spending cuts to government programs favored by both parties.

Obama and his advisers believe the president has little to lose and possibly much to gain with voters by campaigning around the country with vigor for job creation and deficit reduction this fall, even if Republican lawmakers back in Washington hand him his hat.

The president will ask Congress to approve a collection of ideas to put unemployed people into jobs -- including construction workers, nurses, teachers, and other middle-class and lower-income people who have lost much during the longest and deepest downturn since the 1930s. Obama will reprise his ambitious call to mix spending cuts with tax changes to achieve long-term deficit reduction.

“You’re going to see in the fall the president be more on offense on a jobs plan,” said a Democratic source who did not want to be identified. The strategy is to bundle ideas that enjoy some bipartisan support and would credibly produce jobs, then enlist the public to pressure Republicans to work with Democrats. The goal is to “only give Republicans one way, which is to oppose a real, effective jobs plan -- the only plan that can put people back to work -- and force them to either consider it or say no,” the source added. “In other words, ‘This is our plan. Your move.’ ”

Obama’s detailed plan, the Democratic source added, “will not only fully cover the cost of jobs and growth measures, but will achieve balanced deficit reduction as well. There’s no good reason, other than politics, that would stop Congress from working with the president to pass these initiatives, and if they fail to act, the president will take his case directly to the American people.”

During a bus tour this week through parts of Minnesota, Iowa and Illinois, the president accused Republicans in Congress and the GOP presidential nominees of putting political interests ahead of their country’s national interests by refusing to compromise on raising revenues to help shrink deficits.

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Alexis Simendinger covers the White House for RealClearPolitics. She can be reached at asimendinger@realclearpolitics.com. Follow her on Twitter @ASimendinger.

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