As rich gain optimism, lawmakers lose economic urgency


President Obama attends a roundtable at the Center for Urban Families (CFUF) in Baltimore, Friday, May 17, during his second “Middle Class Jobs and Opportunity Tour.” (Jacquelyn Martin/AP)

Washington has all but abandoned efforts to help the economy recover faster — and lawmakers don’t seem worried that voters will punish them for it.

There are no serious negotiations underway between the White House and congressional leaders on legislation to spur growth, and no bipartisan “gangs” of senators are huddling to craft a compromise job-creation package.

Yet economic growth remains slow by historical standards, and 11.5 million Americans are still looking for work. More than 4 million people have been unemployed for longer than six months. A Washington Post-ABC News poll found in April that two-thirds of Americans said jobs were difficult to find in their communities.

But lawmakers appear to feel little electoral pressure to address those concerns. They disagree vehemently over what actions would make a difference, and lately they’ve been distracted by other issues and scandals. There also is mounting evidence that the political donor class — wealthier Americans — is feeling a stock-market-fueled surge of optimism about the economy. It all adds up to inaction.

The House has approved only three bills — if you include efforts to repeal President Obama’s signature health-care law — that could be considered economic policy measures; none has been signed into law.

What’s more, lawmakers have taken actions that many economists say have actually slowed growth: They allowed the payroll tax cut to expire, raised income taxes and allowed the sequester to take effect.

At this point in 2012, the story was very different. Obama and Republicans had reached agreements on maintaining a payroll tax cut and increasing funding opportunities for start-up companies. The House had passed at least six other bills designed to boost job growth.

“I’m disappointed that there isn’t more of an effort being made” on the economy, said John Engler, the Republican former governor of Michigan who is now president of the Business Roundtable. “I don’t know if people have concluded that there’s been a reset — we’ve accepted these higher levels [of unemployment] and that’s a new normal. I hope not.”

One key Washington constituency is feeling a new normal: stock market highs.

Fifty-two percent of white Americans earning $50,000 a year or more are optimistic about the national economy, a 13-percentage-point increase from December, according to a new Washington Post-ABC News poll. Thanks largely to that shift and to persistent optimism among higher- income nonwhites, economic optimism among all Americans is at its highest level since early 2009.

The change tracks the performance of the Standard & Poor’s 500-stock index, which has risen 20 percent in the past six months. Higher-income Democrats and, perhaps most notably, Republicans are all feeling the effects. Obama’s approval rating for handling the economy among higher-income Republicans and GOP-leaning independents, while dismal, has more than doubled over the past six months. (The new Post-ABC poll was conducted May 16 to 19 among a random national sample of 1,001 adults. The results from the full poll have a margin of sampling error of plus or minus 3.5 percentage points.)

Yet a majority of voters continue to tell pollsters that the economy is the nation’s most important problem. When Gallup asked Americans which issues Congress should make a high priority, the top two finishers were “creating more jobs” and “helping the economy grow.” (“Reducing gun violence” and “reforming immigration” were a distant ninth and 10th, respectively.)

Politicians are still talking a lot about jobs: Obama has made several trips across the country, including to Baltimore last Friday, to promote pieces of his economic agenda. House Speaker John A. Boehner (R-Ohio) proclaimed “jobs is what this is all about” in hailing last Thursday’s health-care repeal vote.

Still, other issues have consumed the bulk of lawmakers’ attention: immigration and gun control in Obama’s case and a trio of administration scandals in the case of congressional Republicans.

Frank Newport, Gallup editor in chief, said the fact that guns and immigration have received more recent legislative attention than the economy may reflect the power of small and concentrated constituencies such as the families of the Newtown, Conn., shooting victims and the National Rifle Association.

“You’re kind of asking the question, to what does Congress respond?” Newport said. The economy, “maybe that’s too diffuse and too broad. You don’t have the same kind of intensity of people who say, we’re fighting for more jobs.”

Some pollsters say the problem with the economy is the degree to which Republicans and Democrats disagree over how best to speed up growth in the short term. Government spending levels are the biggest sticking point: Republicans want to cut them even more, saying that federal debt is slowing the economy. Obama and many other Democrats want to spend more in the short term by repealing the sequester and funding infrastructure projects in an effort to stimulate economic activity.

“When you’ve got Republicans saying government is doing too much and needs to get out of the way of business, and Democrats saying government needs to step in and do more to help people out, it becomes pretty hard to bridge that economic gap,” said Jon McHenry, vice president of North Star Opinion Research, a Republican firm that polls for clients including Sen. Marco Rubio of Florida.

Voters aren’t offering strict guidance to break that impasse, some analysts say. “They say they want jobs,” said Lanae Erickson Hatalsky, director of Social Policy and Politics at the Democratic think tank Third Way who has sat in on several focus groups that featured economic questions. “But average Americans don’t have a prescription for Congress for what they want to do about that.”

Some lawmakers also appear to be reading the results of the 2012 election — in which Obama won a second term and neither house of Congress changed hands, despite high unemployment — as evidence that voters have resigned themselves to a sluggish economy and won’t punish leaders for its performance.

Business groups see several possibilities for compromise, some of which poll well among voters across the ideological spectrum. Engler’s list includes expanding domestic energy production, streamlining the tax code and borrowing at cheap interest rates to fund highway projects and other infrastructure development.

Obama and lawmakers could also work together to speed through new agreements to expand trade with Europe and Asia, said Aric Newhouse, senior vice president for policy and government relations for the National Association of Manufacturers, an issue for which both parties have expressed broad support.

Sen. Amy Klobuchar (D-Minn.), vice chairman of the Congress Joint Economic Committee, said her efforts have moved past a “crisis mentality” and talk of “stimulus” and into measures to boost America’s economic competiveness in the long term, including skills training for workers, infrastructure improvements, export promotion and streamlining some government regulations.

She’s optimistic some of those initiatives could win enough bipartisan support in both the Senate and the House to become law this year. “If it was up to me,” she said, “this is all we’d be doing.”

Jim Tankersley is the editor of Storyline, where he explains complex public policies and illuminates their human impact. He's from Oregon, and he misses it.
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