Jobs summit underscores dilemma

OMB Director Peter Orszag, center, and Interior Secretary Ken Salazar wait for the jobs forum to start.
OMB Director Peter Orszag, center, and Interior Secretary Ken Salazar wait for the jobs forum to start. (Marvin Joseph/the Washington Post)
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By Michael A. Fletcher
Washington Post Staff Writer
Friday, December 4, 2009

President Obama's jobs summit was aimed at producing ideas to battle a surging unemployment problem exacting ever greater economic and political toll, but the event only highlighted the tough dilemma he confronts.

Obama says he does not have the money for the plan many of his liberal supporters say packs the biggest employment punch -- direct federal investment in job creation. Instead, he came close to embracing a to-do list for the private sector that sounded rather familiar: weatherization, small-business incentives, regulatory and other help for exporters, and tax credits for employers who hire new workers.

Obama said the proposals could create jobs immediately, while providing long-term benefit at a relatively small expense to the federal government. "Overall, we generated a lot of important ideas," he said. "Some of them, I think, can translate immediately into administration plans and, potentially, legislation."

Speaking to 130 business leaders, union chiefs, economists and others summoned to the White House for the forum, Obama reassured his audience that some of the ideas he cited are under close consideration as his administration grapples with ways to improve the bleakest labor market in a generation.

Constrained by the staggering $1.4 trillion federal deficit, the president has been reluctant to endorse a specific job-creation plan, especially as about half of the $787 billion in stimulus funds remains unspent.

But as he has come under increasing political pressure to take visible action to stem the nation's 10.2 percent jobless rate, Obama said at the summit that he would present some details of his administration's preferred ideas next week.

Labor unions and liberal think tanks such as the Economic Policy Institute have released ambitious proposals to spend hundreds of billions of dollars on job-creation programs focused on public works and infrastructure. The Congressional Black Caucus, increasingly vocal with its concerns about the administration's priorities, has promised to release legislative proposals. But the details of a consensus plan, and the timing of its passage, remain elusive.

Democrats in both chambers are considering a broad range of ideas, including increased help for the unemployed, a tax credit for jobs, additional aid to states, more infrastructure spending, tax reductions for small businesses and a public jobs program. House Democrats have set a tentative goal of passing a package this month.

Obama said that while he appreciates the need for federal investment to fight the nation's high unemployment, private business, not government, holds the key to future job growth. "Ultimately, true economic recovery is only going to come from the private sector," he said.

Instead, Obama and his economic advisers, concerned about balancing the need to create jobs against the need to reduce the deficit, have focused on measures in which they can use government money to leverage private investment.

"I think the president is between a rock and a hard place here," said Carl Schramm, chief executive of the Kauffman Foundation. "There were a lot of good ideas, but all of them cost money, and that is something the president doesn't have."

John Podesta, a close Obama ally and a chief of staff under President Bill Clinton, echoed that theme, saying Obama is caught between the need to create jobs and other economic challenges.

"Trying to get something going, particularly quickly, the range of options is constrained by the fiscal picture in the country," Podesta said after the forum. "Trying to find that sweet spot is difficult."

Obama defended his economic policies, saying that they have helped pull the economy from the brink of disaster, while dramatically slowing the pace of job losses and fostering growth for the first time in a year.

But with the nation's jobless numbers projected to rise for months, he acknowledged that more must be done. Obama said he is "not interested in taking a wait-and-see approach when it comes to creating jobs." Yet, he repeatedly returned to his point that the ability of the government to spur job creation is "limited."

After the forum, participants separated into six groups. Obama dropped in on a session titled Creating Jobs through the Rebuilding of America's Infrastructure, at which he said big infrastructure jobs are not the best idea for quick job creation.

"The tension we've been seeing is that what is good long-term may not necessarily work as an immediate, short-term stimulus," he said, adding: "The term 'shovel ready' -- let's be honest, it doesn't always live up to its billing." He added a little later: "Without the American people seeing this translating into job growth right now, it's hard to get them to be interested in what's happening two years down the road."

At the same time, Obama sounded less than enthused about doing more road repaving and other faster-acting repairs that have dominated the early infrastructure spending in the stimulus plan.

Obama also scoffed at the notion that the Chinese are trouncing the United States economically with their more rapid and more extensive infrastructure work. He saw the fruits of that work on his recent trip to China, he said, but China was a different place than this country.

"The Chinese don't have this thing called democracy we have to deal with -- so shoveling out a whole lot of money, tearing down whatever's there, conscripting folks to do the work is not as tough," he said.

Staff writers Alec MacGillis, Michael D. Shear and Ben Pershing contributed to this report.

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