Nation's Economic Crisis Forces Democrats to Focus More Intensely on Creating Jobs

Job-seekers look for opportunities and work on their résumés at WorkSource California in Los Angeles.
Job-seekers look for opportunities and work on their résumés at WorkSource California in Los Angeles. (By Reed Saxon -- Associated Press)
By Alec MacGillis
Washington Post Staff Writer
Sunday, November 16, 2008

For most of his campaign, President-elect Barack Obama's economic message was a call to restore balance to an off-kilter system, with investments in health care and education and reforms to the tax code and labor laws.

But the Democratic message on the economy is now boiling down to a more blunt and focused rallying cry: jobs, jobs, jobs.

With unemployment claims at a 14-year high, and with Goldman Sachs economists predicting that the jobless rate could rise to 8.5 percent by the end of 2009, Democrats are seizing on job creation as an argument for aggressive action that they say will be hard for Republicans to resist.

Democrats are using the promise of tens of thousands of new jobs building bridges, public transit lines and port facilities to push for an infrastructure program that carries echoes of the New Deal's Works Progress Administration. After Republican opposition last week scuttled talk of a more limited stimulus package in the short term, Democrats plan to wait until January -- when Obama takes office and an even larger Democratic majority controls Congress -- to move forward with legislation for the infrastructure program, which would be part of a stimulus package that some economists say needs to be at least $300 billion.

The Democrats' talk of energy is being framed more than ever around the prospect of more "green" jobs: building wind turbines and solar panels, for example, or retrofitting buildings to make them more efficient. Even Democratic plans to expand health coverage are being billed as job-creation measures. The thinking is that universal coverage will lower health-care costs and make companies more willing to hire, as well as create new health-care jobs.

"People are starting to see that the loss of jobs is starting to cascade. You start reading about 2,000 people here, 900 people here, it's bam to bam to bam, and at this point, no one thinks they're immune," said House Labor and Education Committee Chairman George Miller (D-Calif.). "So energy becomes about jobs as much as it is about the economy. Health care becomes about jobs as much it is about the economy."

Obama and other Democrats are also promoting a $50 billion rescue package for the Big Three automakers as a way to save the more than 2 million jobs that some economists estimate could be affected as a bankruptcy rippled outward. "For a while, this crisis did not hit Main Street so deeply, but now it really has," said Rep. Sander M. Levin (D-Mich.), who is helping lead the push for a bailout. "What you have is just a huge impact in terms of the loss of jobs that's pervasive throughout the country."

And with the 2008 election just past, the jobs mantra is already emerging as a dominant Democratic theme in the next round. Terence R. McAuliffe, a former Democratic Party chairman, announced his possible candidacy for governor of Virginia next year with a promise to use his many corporate connections to bring new jobs to the Old Dominion. In an interview Friday, he said that he knows "most of the CEOs and can open that door and make that pitch."

"Jobs is the centerpiece of the agenda right now," said Rep. Chris Van Hollen (Md.), who leads the Democratic Congressional Campaign Committee. "That's what an economic recovery is all about, putting people in America back to work. . . . Republicans in Congress seem not to have gotten that message -- but come January, that logjam will break."

Republicans scoff at the Democratic rhetoric, saying Obama's plan to raise taxes on the wealthy is likely to deter job growth. Doug Holtz-Eakin, the main economic adviser for Sen. John McCain's campaign, said Democrats are focusing on job creation precisely because they know that McCain's charges about the stifling effect of Obama's tax plans were resonating with voters in the final weeks.

Going forward, Holtz-Eakin said, the Democrats would suffer if they draped too much of their agenda onto job creation. With the annual deficit approaching $1 trillion, he said, the only way to pay for the spending would be with huge cuts in defense spending or with large tax increases, because "arithmetic is their enemy, and you can't fool Mother Nature forever."

"A growth agenda is appealing to the American people, but if he changes that to a fairness agenda, he's going to have trouble," Holtz-Eakin said of Obama.

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