Economic Crisis Boils Democratic Message Down to Jobs
Health Care, Energy Still Part of Agenda

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.

Some Democrats acknowledge that the increased focus on jobs creates a tension of sorts. Obama's economic message during the campaign was an overarching argument that too many Americans are being left behind even amid growth and that a new administration needed to expand health coverage, make the tax code more progressive, invest in alternative energy and make it easier for unions to organize workers.

Some elements of the agenda fit more neatly than others when the emphasis narrowed around job creation -- notably, plans for spending on infrastructure and on alternative energy and conservation, and for eliminating tax breaks for "companies that send jobs overseas."

But some advocates of education reform worry that their issue could fall to the wayside since benefits of the changes they seek would accrue over the longer term. And union leaders are trying to ensure that Obama will still pursue legislation to make it easier to organize workers, even though that has generally been sold as a way to benefit existing workers rather than to create new jobs.

"We've got to create good jobs. Creating low-wage jobs is not going to do what we need to do for our families and our economy," said Anna Burger, secretary-treasurer for the Service Employees International Union. "It really all goes together."

Some Democratic economists say it is just a matter of setting priorities, with immediate stimulus measures coming first and broader reforms later. Infrastructure and green-jobs spending would lead off, along with a middle-class tax cut and expanded food stamps, unemployment insurance and aid to state governments, followed by an expansion of children's health insurance, and then by broader health-care, education and labor law changes.

Obama's agenda "has always been about jobs, job creation in the U.S., but it also has been about shared growth and strengthening the social compact through health care, pensions and higher education," said Gene Sperling, who led Bill Clinton's Council of Economic Advisers. "He's been very clear that we have to deal with the financial and economic crisis but that the priorities of health care and education and energy have to be part of that broader agenda."

James Kvaal, a fellow at the left-leaning Center for American Progress who advised former North Carolina senator John Edwards's presidential campaign, compared the proposed infrastructure and green-jobs package to the New Deal. Though the workers would probably not be employed directly by the government, as was the case then, it would be another "opportunity to create jobs now, but also something that has lasting value."

Kvaal said there is such consensus emerging about the need for a major stimulus, Obama could hold off for now on raising taxes on the wealthy to pay for some of it. "The focus is less likely to be on paying for it year by year and rolling back the tax cuts, and more about being willing to run a deficit for now and get the economy back on its feet," he said.

Bill Samuels, the AFL-CIO's legislative director, said that even though only older Americans recall the New Deal's jobs programs, there would be popular support for an equivalent undertaking. "The public is watching unemployment spike and has to be worried enough to try something bold," he said. "What's exciting about Obama is that he's willing to come in and take bold steps. The public is ready for that -- and they'd be disappointed if he were not."

But McAuliffe, the former Democratic chairman, offered a cautionary note: The public would be all for an investment in job creation as long as the jobs materialized. "It's going to be brutal next year. And the Democrats will have control then, and it will be incumbent on us to produce," he said. "Voters don't care if they're Democratic jobs or Republican jobs; they just want people who can produce."