Who Gets US Out of the Hole We Are In?

Voters are in a surly temper. The economy stinks. Jobs are scarce. Given all this, can a compelling choice between the parties be posed for voters in the midterm elections? Yes, I still think so.
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Voters are in a surly temper. The economy stinks. Jobs are scarce. Wages are under pressure. One in 4 homes with mortgages is underwater. Retirement savings have been butchered; pensions are at risk. Bailed out bankers are paying themselves record bonuses. The oil keeps fouling the Gulf. And the jobs aren't coming back. It is ugly out here.

Not surprisingly, faith in Obama is starting to flag. According to a recent Washington Post poll, a startling 58% have only some or no faith that he will make the right decisions about the country's future. Congressional Democrats fare worse. Republicans would be salivating, only folks overwhelmingly don't want to rehire them either. A staggering 72% have little or no trust in congressional Republicans on the country's future.

And now the election season starts. Last weekend, President Obama traveled to Missouri in support of Senate candidate Robin Carnahan and delivered rousing speeches framing the choice the voters must make this fall. Republicans, he scorned, have "got that 'no' philosophy, that 'you're on your own' philosophy, the status quo philosophy -- a philosophy that says everything is politics and we're just going to gun for the next election, we don't care what it means for the next generation. And they figure if they just keep on saying no, it will work for them, they'll get more votes in November -- because if Obama loses, they win; if we can stop him then we'll look better."

This election, the president said, will offer a choice: "It's a choice between the policies that led us into this mess and the policies that are leading us out of this mess. It's a choice between falling backwards or moving forward."

His critique of Republicans has the advantage of being true. With unparalleled discipline, Republicans voted with virtual unanimity to obstruct every major reform offered by the president, breaking all records on filibusters along the way. To the extent that they offer any program, it is a retread of the very policies that drove us off the cliff -- top end tax cuts, deregulation, drill, baby drill, ardent defense of corporate subsidies and multinational trade accords. Their solution to health care, as Rep. Alan Grayson gibed, is don't get sick. Their solution to unemployment, as Republican Sen. Kyl and others have argued, is starve or work. (Kyl opposes extending unemployment benefits, so people will be desperate enough to take jobs that pay far less, assuming they exist.)

Will voters vote for party of no -- or as John Boehner ranted, in a health care screed immortalized in a YouTube video, the party of "hell no, you can't?"

Well polls suggest that they just might. Off-year, low-turnout elections are the occasion to cast a protest vote. Voters aren't really voting for an opposition candidate or her or his policies, they are voting against. And that clearly is what Republicans are counting on.

Can a compelling choice be posed in midterm elections held in a bad economy?

The president would really like to campaign for credit for one of the most productive congressional sessions in decades. Against Republican obstruction, the White House and Democrats in Congress have passed the largest recovery act in history, the largest increase in student aid since the GI Bill, the most significant health care reform since Medicare, the greatest expansion of community service since Civilian Conservation Corps in the 1930s, the biggest investment in renewable energy ever. This week the Congress will pass, again, over virtually unified Republican opposition, the largest reform of finance since the 1930s. The White House will roll out studies on the benefits of the health care bill, the millions of jobs created by the stimulus, the consumer protections in financial reform. They'd like a little credit. If only people understood what we've done, they strongly believe, they'd reward us at the polls.

These statements are true but largely irrelevant... As dramatic as the reforms have been, they have not been sufficient to the crisis. And, at the end of the day, what matters is jobs and the economy. House Minority leader John Boehner's response to Obama's argument is simply "Where are the jobs?" Many Americans may think the real choice is between those advocating the policies that got us into the mess and those advocating policies that have failed to get us out.

George W. Bush survived a jobless midterm, but only because of 9/11. In 1994, the economy was actually beginning to generate jobs, but Clinton and Democrats were punished, and the Gingrich Congress was elected. The last president to survive a bad economy in an off-year, first term election was Ronald Reagan. He cut taxes, ran up military spending and exploded the deficit. Despite a deep recession, Reagan got Republicans to unite on a message of "stay the course." He pounded relentlessly from the first day of his administration on the failure of liberalism, on government as the "problem, not the solution," blaming Democrats constantly for the downturn. Democrats made gains, but Reagan survived to go on to re-election.

Obama's message parallels Reagan's. We've begun to create jobs, stay with the policies that "are getting us out of the mess," rather than going back to those "that got us into the mess."

That might work if the economy continues to show ever greater signs of life. But this economy is in real trouble -- and even the slow growth we've had is threatened by the premature turn towards deficit reduction. The IMF estimates that the tightening in the public budget will equal 4.6% of GDP over 2009-2011. States and localities are enacting brutal cuts in the coming months. Growing trade deficits will subtract another 1% of GDP at least. We may not descend into a new recession, but it's hard to see what generates jobs and growth to make up for the fiscal tightening already underway.

The White House and Senate Democrats seem intent on continuing to push a multifaceted reform agenda. On tap is the START Treaty, comprehensive energy legislation, the war supplemental, unemployment insurance extension, the Kagan confirmation to Supreme Court, possibly immigration reform, and more.

Some of this is unavoidable, but the White House would be better advised to focus as much as possible on jobs, even at the risk of aggravating liberals and constituency groups. The president needs to speak directly and repeatedly on where we are, explaining the reality that while the recovery act did stop the freefall and generated millions of jobs, the crisis was far worse than predicted. He should be calling for more action to create jobs. Raise the ante with a bold package of measures -- including direct public hiring, aid to states and localities, use the money paid back by the banks to give small business access to lower interest loans, call for a an infrastructure bank to mobilize private capital to rebuild America. Shelve the free trade agreements and challenge China and Germany, stating flatly that the US will not allow a return to the old global imbalances. Call on states and localities to pass and enforce domestic content legislation to ensure that taxpayers dollars create jobs here rather than abroad. Push the elements in the energy bill that generate jobs -- from retrofitting public buildings to permanent tax credits for renewable energy sources. Push passage of jobs creating transport and infrastructure appropriations.

The conservative noise machine already argues that the president, having run up record deficits with a failed stimulus program, now wants more of the same. Virtually all of these measures will be opposed -- as everything else has been -- by Republicans. Little of it will survive the inevitable Republican filibuster in the Senate.

Why propose what is unlikely to pass? Because these measures are needed, and at least will clearly define the choice for this fall. Why propose measures that will increase the deficit that people are said to be freaked out about? Because the majority of Americans, if forced to choose, make the right choice - for focus on jobs over deficits. So pose the choice between a White House and Democratic Congress still pushing for action on jobs, and an opposition focused on deficits and wedded to the policies that drove us off of the cliff.

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