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Report: Obama to Unveil "New" $300 Billion Stimulus in Jobs Speech

Dribs and drabs of the president's forthcoming jobs plan are beginning to leak out, offering a cobbled-together outline of what The One will pitch when he addresses Congress tomorrow evening.  Bloomberg reports the proposal will represent the opening stanza of a stimulus/deficit reduction two-step:


President Barack Obama, facing waning confidence among Americans in his economic stewardship, plans some $300 billion in tax cuts and government spending as part of a job-creating package, U.S. media reported on Tuesday.  The price tag of the proposed package, to be announced by Obama in a nationally televised speech to Congress on Thursday, would be offset by other cuts that the president would outline, CNN reported, citing Democratic sources.

Bloomberg News said the plan would inject more than $300 billion into the economy next year through tax cuts, spending on infrastructure, and aid to state and local governments.  Obama would offset those short-term costs by calling on Congress to raise tax revenues in a deficit-cutting proposal he will lay out next week, the news agency reported, without citing sources.

In addition to his now-familiar calls for stepped-up infrastructure spending and extending the payroll tax cut, the president will also call on Congress to infuse struggling state budgets with direct federal aid:

...Nearly half the stimulus in Obama's plan would come from tax cuts, including an extension of a payroll tax cut paid by workers and a new decrease in the amount paid by employers. Vice President Joe Biden told reporters last month a payroll tax cut for employers was being considered.  Direct aid to local governments will focus on stopping layoffs of teachers and first responders, Bloomberg said.


I must ask: In what significant way does this "new" scheme differ from the failed stimulus of 2009 -- aside from the fact that it's half-a-trillion dollars cheaper?   Many citizens will view this as a regurgitation of tired ideas:  Infrastructure expenditures (do I hear "shovel ready projects"?),  a payroll tax cut extension (somewhat akin to "the largest middle class tax cut in history" -- a claim, incidentally, that has earned Obama a rare Four Pinnochios from WaPo's factchecker), and state-level bailouts to "save and/or create" government sector ("first responder") jobs.  All of this has happened before, and -- if Obama gets his way -- all of this will happen again.  But to what end?  Even if we extend the payroll tax cut, that merely preserves the listless status quo.  Even if we save some firefighters' jobs by bailing out state and local governments, how will that spur growth or create jobs?  And will these supposed shovel ready projects actually materialize this time, or will Obama's current line ("there is work to be done, and there are workers ready to do it") become another Obama punchline at some point down the road?

There's also the fascinating issue of the pay-fors.  Obama's plan reportedly includes an injection of $300 billion of government and tax code spending next year.  Recall for a moment that the much-discussed Budget Control Act (ie, debt deal) of early August cut discretionary spending by a mere $21 Billion in 2012.  A GOP Senate source tells me the real number is really closer to $7 Billion.  (The same aide helpfully points out that just 4 percent of the 2009 Recovery Act was actually devoted to infrastructure spending, further highlighting this president's rhetoric/reality gap).  The "new" stimulus would blow the debt deal's microscopic progress toward deficit reduction out of the water if it's not offset elsewhere.  Yes, early reports suggest that Obama intends to explain how he intends to defray the costs of these new "emergency" outlays...but he won't do so until sometime next week.  This revelation is treated as something of a throwaway line in the Reuters write-up linked above, but it strikes me as fairly significant. 


Here's why: As we followed last week, the White House made a great fuss over scheduling a joint-session, nationally-televised address for tonight Thursday.  Most Americans intuitively understand that these events are typically reserved for State of the Union and wartime addresses.  Occasionally, we see presidents try to harness the optics and prestige of a Congressional address to tackle a contentious domestic policy issue; both Bill Clinton and Barack Obama went down this path on healthcare reform.  In this case, Obama will deliver his second non-SOTU, non-war-related speech in this illustrious setting in the span of two years.  If, after all this hype, he announces the tepid, piecemeal, warmed-over agenda items discussed above -- and punts the specifics of how he intends to pay for his proposals (which, by the looks of the Bloomberg report, will include tax increases) to yet another speech or policy document -- I suspect many Americans will be left wondering, "what was the point of that?"  The point, of course, is to create the impression that Obama is doing something about jobs. But in this calculation, the White House ignores the rule of diminishing returns. 

More and more Americans have given up on paying any heed this president's rhetoric.  This should worry team Obama.  Even more distressing, eight in ten voters now say his policies have either had no effect, or have made our problems worse.  If he summons the most potent tool in his presidential soapbox arsenal -- a nationally-televised sermon to Congress -- just to offer up an incomplete dud of a speech, he runs the risk of permanently and irrevocably wounding his remaining credibility.  This is a big gamble.  In poker and politics alike, when you go all-in, you'd better have a strong hand.  Unless he's got an unforeseen trump card tucked up his sleeve, this president could be on the brink of losing his political shirt.


UPDATE - Republican leaders are already panning the proposal as "more of the same," and one GOP Congressman has annouced he won't even show up tomorrow night:

Walsh told CNN's Wolf Blitzer on Friday, "This is nothing but a political move by this president, and I simply didn't want to be a pawn in this political theater."  Instead, Walsh said he will return to Illinois for the speech, telling MSNBC's Martin Bashir on Friday, "I'm going to fly back home and talk to the folks who really know what we need to do when it comes to job creation, not this president."

Politically and stylistically, I think Walsh is wrong here.  But is his practical calculus really that far off?

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