CQ TODAY ONLINE NEWS
Sept. 7, 2011 – 11:01 p.m.
Jobs Gaining Ground in Debt Debate
By Paul M. Krawzak and Joseph J. Schatz, CQ Staff
Some of Washington’s most stalwart budget hawks say the new deficit reduction committee may be able to juggle two seemingly contradictory economic imperatives — reducing government red ink while giving a boost to job creation.
But others say such a melded effort might compromise the core mission of the Joint Select Committee on Deficit Reduction.
And even those who are open to the idea are wary of pursuing short-term economic stimulus proposals that are not financed.
President Obama is set to present his job growth proposals to a joint session of Congress on Thursday evening, hours after the joint committee holds its first meeting to organize and begin the task of finding a minimum of $1.2 trillion in deficit reduction by Thanksgiving.
Robert L. Bixby, executive director of the Concord Coalition, was one of several deficit reduction advocates who said the jobs issue is not incompatible with the joint committee’s work. Although it is essential for the committee to focus on deficit reduction, Bixby said, the economy’s tepid recovery from recession may justify some initiatives aimed at spurring growth, as long as the costs are offset over the next decade.
“If the president has something that looks like it has good potential bang for the buck in the short term and would pay for it over a 10-year period, that would be something that you would want to consider,” Bixby said.
And Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said any short-term measures to boost job growth would need to be fully offset. “I do think the only way the jobs measures will pass is as part of an overall fiscal package,” MacGuineas said. “And I think in order to be dropped into that package, they’ll actually have to be paid for.”
No matter how critical addressing the economy may appear to be, however, some, such as former U.S. Comptroller General David Walker, founder and chief executive of the Comeback America Initiative, say deficit reduction and jobs programs should be kept separate.
Walker favors addressing the jobs shortage. But the joint committee members “should focus solely on achieving their deficit reduction objectives,” he said, suggesting that to do otherwise would weaken the panel’s budgetary mission.
Broadening the Mandate
Democrats in both the House and Senate have been pushing for the panel to add job creation to its responsibilities, while Republicans have generally been skeptical of that idea or flat-out opposed to it.
Obama has urged Congress to extend a reduction in the Social Security payroll tax paid by workers before it expires at the end of the year. He is expected to push for this and other economic incentives in his speech.
Jobs Gaining Ground in Debt Debate
Briefing reporters Wednesday, White House spokesman Jay Carney said the president views economic growth and deficit reduction as intertwined. “This is not an either-or proposition,” Carney said. “We must, and we can, act to grow the economy and create jobs now. And we must, and we can, in a responsible way, pass the measures that will ensure that we reduce our deficits and get control over our debt in the long term.”
Steve Bell, senior director of the Economic Policy Project at the Bipartisan Policy Center, said it will be difficult for the joint committee to avoid jobs measures. “In the battle between debt and jobs, those two scary four-letter words, in my 36 years, I’ve never seen jobs lose,” said Bell, who previously served as a top Senate aide.
Bell said he would like to see the committee propose a one-year suspension of the payroll tax to encourage economic growth. That was one of the recommendations in a deficit reduction proposal developed last year by Pete V. Domenici, a Republican from New Mexico who served as Senate Budget Committee chairman in the 1980s, and former Congressional Budget Office Director Alice Rivlin.
Seeking More Savings
Some lawmakers as well as budget observers are urging the joint committee to go beyond its statutory mandate to seek a minimum of $1.2 trillion in deficit reduction. To do so might make it easier to include job creation initiatives in the mix because the costs would essentially be offset by the larger deficit reduction goal.
For instance, Senate Budget Chairman
Conrad wants the committee to include jobs growth stimulus in the form of an infrastructure program. He anticipates that Obama will “make the case that you have to have a two-track approach here. You’ve got to be focused on jobs but in the context of an overall plan that deals with our deficit and debt.”
And some lawmakers, such as Massachusetts Sen.
Many economists agree that the goals of boosting job growth and deficit reduction are not contradictory.
“For all of the talk about medium-term and long-term budget reduction packages, none of them are going to work if the economy doesn’t get back on its feet,” said Bill Gale, senior fellow at the Brookings Institution. “And so doing both of those things now would be better than doing either one of them, which is much better than doing neither of those.”
Likewise, Douglas Holtz-Eakin, a former CBO director and adviser to Republican Sen.
“Growth and jobs should be a focus of the committee. But we are past the time when temporary stimulus measures of the kind we have seen in the recovery act and since are appropriate,” Holtz-Eakin said. He said the committee could spur economic growth by tackling a tax overhaul and restructuring Social Security to make it sustainable.
Joseph J. Schatz contributed to this story.