What New Jobs Fix Will Obama Propose Tonight?
DAVID GREENE, host:
OK, the Republican presidential candidates had their say in California. Tonight, President Obama gets his before a joint session of Congress. And the subject will be jobs.
Economics editor David Wessel of The Wall Street Journal is here this morning with a preview and some thoughts about what a new presidential jobs plan might or might not accomplish.
David, good morning.
Mr. DAVID WESSEL (Economics Editor, The Wall Street Journal): Good morning.
GREENE: Your paper ran a story I read, it was from Youngstown, Ohio this week. And a Democratic voter said people are ready for that one thing, that one victory, and thats all it will take to get us back. Is there something like that, a bold fix that President Obama can deliver tonight?
Mr. WESSEL: No. The president thinks there are some things that the government could do to make the economy better, but I think he will try and emphasize that there is no magic bullet which seems to be a cliche in all these conversations. And he's going to try and say, look, there's some things we can do and they are things that Republicans and Democrats have, at times in the past, supported. Things like spending on infrastructure, which is usually more popular than other government spending, and sending money to state and local governments so they'll lay off fewer teachers and cops and firemen.
GREENE: This all must be expensive. I mean we've heard some price tags coming out, perhaps this could all cost in the neighborhood of $300 billion?
Mr. WESSEL: Well, it is expensive, and yes, we expect the president's proposal will cost more than $300 billion over the next year. Basically that's a form of fiscal stimulus, although he won't call it that. This morning in Paris, the Organization for Economic Cooperation and Development, which is a multilateral forecasting outfit, said that the world economy is on the risk of another recession. The president knows that the country has a deficit, he knows that the Americans are worried about the deficit, so I expect him to package this new stimulus with a call that this new supercommittee of 12 members of Congress come up with enough savings to cover the cost of the stimulus over the 10 years ahead of us, on top of the money it's already supposed to find to reduce the deficit.
GREENE: Well, you're using the term stimulus, you say President Obama will probably not use the term stimulus. Let's go back to the beginning of his presidency. I mean it was a moment of economic standstill. The big three automakers were nearly belly up, the banking system was in deep trouble. He proposes an $800 billion stimulus. Then we come to today, we still have high unemployment. What's the thinking here about how a new stimulus can do the job.
Mr. WESSEL: Well, you know, last night in the Republican debate, we heard Governor Perry of Texas say that everybody knows that Keynesian economics doesn't work. Well, the president doesn't believe that. The president's advisors think the economy would have been worse if the government hadn't pumped all that money in. The economy is doing much worse than they anticipated and they think more stimulus would make it better, or at least prevent it from getting worse.
They know it's unpopular, and that's why the president, I think, will talk about the individual elements that he thinks appeal to people, rather than making the case that we need more government spending at a time like this.
GREENE: One of the proposals you mentioned that the president could bring up, the idea of, you know, further payroll tax relief. I mean you talk about tax cuts. You expect Republicans to just jump on board with them, but we've heard some Republicans who supported that idea in the past coming out and saying they're not going to support it this time. What does that say about the mood among Republicans? Are they going to support anything that the president offers?
Mr. WESSEL: Well, you know, the joke inside the administration is that the only tax cuts Republicans don't want to extend are tax cuts that President Obama does want to extend. I don't think Republicans are going to embrace this in its entirety and certainly they're not going to do it initially. They really are convinced that stimulus doesn't work, and that smaller government with less regulation, getting government out of the way and so forth, would do more to create jobs.
But I think Republicans in Congress are feeling a little pressure. They know from the polls that the debt ceiling debacle hurt them too. And I was interested that Speaker Boehner and Majority Leader Cantor, the other day, sent a very conciliatory letter to the president and mentioned some things that they might be able to work with him on. The two they mentioned were infrastructure spending and a change to the unemployment compensation system, where some people would get a tryout and they wouldn't get paid by their employer, but they'd collect benefits.
GREENE: All right, well I'll be listening to that speech tonight. David Wessel, economics editor of the Wall Street Journal, thanks so much, as always, for being with us this morning.
Mr. WESSEL: You're welcome.
GREEN: And you're listening to MORNING EDITION from NPR News.
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