Full disclosure: I am not an economist. I am no expert in the economy. Having said that though, it's become clear, based on independent, nonpartisan projections, that there are numerous steps government can take to improve and broaden the economic recovery. Beyond the three Nation Magazine-endorsed executive actions the President could take (all of which combined would have a minimal - but necessary - effect on economic growth), there are a few legislative initiatives that, if they were to become law, could certainly help:
First, the damaging cuts of the sequester ought to be repealed entirely. According to the estimates of the nonpartisan Congressional Budget Office (CBO), sequestration could prevent the creation of up to 1.6 million jobs next year. The losses incurred by sequestration are almost entirely in the public sector, which has already been damaged more significantly than the private sector in the recovery. The cuts to scientific and medical research, Head Start, transportation, housing, commerce, and domestic violence prevention programs, among other things, are harmful for the middle class, reducing the workforce at a time of a fragile recovery, and treacherous for the broader economy. Repealing these cuts would increase the budget deficit, which is shrinking dramatically, but it would certainly put the economy on a sounder footing as it would spur more government investment and help increase GDP.
Second, the American Jobs Act, legislation drafted by the Obama White House in the fall of 2011, should be enacted. According to John McCain's chief economist from the 2008 campaign, Mark Zandi of Moody's, the AJA would create up to 1.9 million jobs. Indeed, the legislation proposes $50 billion on new and existing infrastructure projects to enhance and build roads and bridges across the U.S. Given the fact that 10,000 bridges are over 60 years old and many across the country are deemed structurally deficient, this initiative would be a huge deal in improving the infrastructure of our country. (More money for high-speed rail projects as part of that infrastructure improvement would be great too!) The bill also proposes payroll tax relief (the two-year holiday expired in the fiscal cliff deal), creating a National Infrastructure Bank with $10 billion deposited initially, $35 billion to hire more police officers, teachers, and firefighters (crucial public sector jobs that the economy sorely needs), and further spending for stimulative measures such as unemployment benefits. Oh and guess what? The AJA is fully paid for as well.
Third, if the House ever passes the Senate immigration bill or some kind of immigration reform legislation, the ultimate law should include this key component of the Senate bill (which passed alongside everything else in that legislation): $1.5 billion for a youth jobs initiative. This funding was proposed by Sen. Bernie Sanders, the Vermont Independent who caucuses with the Democrats. As Sen. Sanders' office puts it, "it would provide the funds to the Labor Department for both summer and year-round employment for low-income youth through approved state plans," and thanks to deficit reduction measures in the immigration bill, the spending is paid for as well. This kind of program is reminiscent of some of the core elements of the New Deal, such as the Civilian Conservation Corps or the Works Progress Administration. The youth employment program would help create up to 400,000 jobs, according to Senator Sanders. It should be noted too that the entire immigration bill as a whole is also quite stimulative, according to the CBO, as it would bring in millions of workers.
As Eliot Spitzer said on "Real Time with Bill Maher" this week, one of the great GOP myths of the last few years was that the Recovery Act, President Obama's 2009 $826 billion federal economic stimulus law, was a bust and "did nothing." That flies in the face of the facts which show that 3.6 million jobs were either created or saved by the Recovery Act. The stimulus helped bring the country out of the dire straits of the financial crisis -- as did the auto rescue and President Bush's $700 billion in TARP spending for the bank bailouts -- and more of that kind of government investment in the economy could increase GDP, spur growth, and create the conditions for a broader, more expansive recovery. Unfortunately, given this Congress' terrible record of passing legislation and Speaker Boehner's mantra that we should judge the Congress on the laws they repeal instead of how many laws they pass, good luck with any of these initiatives becoming law. We can only hope those members of Congress opposed to these initiatives will rethink their attitude soon to help improve the economic recovery.
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