President Obama’s Jobs Proposal: Go Big or Go Home?

With the unemployment rate hovering around 9%, President Barack Obama is set to roll out his jobs package in September. Political pundits have been speculating about the size and scope of the package while many are hoping for a bold proposal which includes some public works projects that will create jobs immediately. Meanwhile, President Obama is currently on vacation with his family in Martha’s Vineyard. There is no doubt that the president deserves a break to recuperate and spend time with his family. Nevertheless, the timing of the vacation is strategically questionable. At a time when the Dow is plummeting, and Americans are asking where the jobs are, the unintended message they’re receiving from President Obama is “don’t worry I have a plan but you’ll have to wait until after my vacation.” Over the past few months, the public has been yearning for strong leadership in Washington. A decision to stay in the White House would’ve given the president a chance to step into that leadership vacuum and send a strong symbolic message to the American public that he is focused like a laser beam on job creation, and hammering out the specifics of his jobs proposal with Congressional leaders.

The soon-to-be-proposed jobs package presents yet another leadership test for President Obama. Will this be a big and bold proposal similar to the “grand bargain” that was hoped for in the debt-ceiling negotiations or will it be a relatively modest proposal that has a greater possibility of passing both chambers of Congress?  If he proposes a big package that eventually becomes law, he will be lauded for his strong leadership.  But if the bill fails to pass in Congress, he will be weakened politically. So will the president fight for a grand proposal that may end up getting voted down in Congress? Or will he push for a smaller package that has a greater possibility of getting passed? Regardless of the political calculations, the ultimate guidepost should be the degree to which the proposal will reinvigorate the economy and stimulate job growth.

Is President Obama’s Leadership Style Effective?

On Monday August 1^st, The House of Representatives passed a two-tier debt ceiling bill. The plan calls for $900 billion in spending cuts over ten years, and establishes a bipartisan committee of 6 Republicans and 6 Democrats that are statutorily obligated to come up with additional spending cuts between $1.2 and $1.5 trillion by Thanksgiving. If the committee fails to reach an agreement, a trigger mechanism of cuts in discretionary spending, and defense spending automatically kicks in- 50% from defense and 50% from discretionary spending. This trigger system is designed to incentivize both Parties to reach a deal. The plan heads to the Senate where many believe it will pass.

With that in mind, President Obama's leadership role in the debt negotiations is worth discussing. There is a growing concern by Democrats that President Obama doesn’t fight long enough or hard enough for what he wants. This feeds into a growing belief within the Republican Party that he will eventually accede to demands if one stands firm. This belief is not completely without merit. For example, during the lame-duck session last December, President Obama seemed implacable in his position to let the Bush tax-cuts expire for the wealthiest Americans but he ended up extending the tax-cuts for both the middle-class and top income earners. On the debt-ceiling debate, he wanted a “clean” debt ceiling bill but didn’t get it. Then he asked for a balanced approach that includes tax increases or closing tax-loopholes for corporations but didn’t get that either even though public opinion was on his side. Yes, he faces a recalcitrant group of Republicans in the House of Representatives, and a non-filibuster proof majority in the Senate. Nevertheless, his leadership style of genuine openness and flexibility that is cloaked in pragmatism doesn’t seem to be working for him at this time.

Just as important, there is also a concern that President Obama doesn’t come to the negotiating table early enough. A criticism that is akin to a basketball player that sits out the first three quarters then comes back in the fourth quarter and wonders why his shots aren’t going in not realizing that he needed to develop a rhythm early in the game. We saw this in the early stages of the healthcare debate when President Obama left it up to Congressional leaders to figure out the specifics of the bill before he later tried to seize control of the debate. By that time, Republicans had already framed the initiative as yet another attempt by a big-government liberal Democrat to control the healthcare system. Similarly, the debt deal negotiations began with Vice-President Joe Biden in what became known as the Biden-led talks which later became the Obama-led talks when the president got more involved. It is unclear how the debate would’ve changed had President Obama been at the table earlier. If i were a betting man, let's just say I'll think twice about putting my money on President Obama to win a negotiating battle with Republicans.