Now, How to Fund Obama’s Jobs Proposal?

Mapping out grand plans is lovely, especially if you don’t worry about the best way to pay for them.

So went President Obama’s much-anticipated jobs speech on Thursday night, during which he punted the proverbial bill for this proposed act to the deficit-reduction committee.

“The agreement we passed in July will cut government spending by about $1 trillion over the next 10 years,” Obama told the joint session of Congress. “It also charges this Congress to come up with an additional $1.5 trillion in savings by Christmas. Tonight, I am asking you to increase that amount so that it covers the full cost of the American Jobs Act.”

Obama promised to release his own deficit-reduction plan on Sept. 19, a move that raised eyebrows among Washington insiders concerned with the budget and growing deficit. Even those who applauded the political boldness of the package wished the president had outlined a payment plan in greater detail.

“He’d be in a better position now if he’d done that,” Alice Rivlin, former director of both the Office of Management and Budget and the Congressional Budget Office, said at an event on Friday at the Brookings Institution.

During his speech, Obama didn’t mention the full $447 billion price tag of his proposed jobs plan. Instead, he handed even more tough choices to the super committee.

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said she wished the president had indicated that he planned to fund the extension of the payroll tax credit by transforming Social Security in a certain way, or that he had better identified offsets to pay for the stimulus.

“There’s an irony in kicking it to the super committee,” MacGuineas said. “The super committee came into existence because nobody was doing the job of budgeting. Now, we’re throwing all of this stuff toward them.”

Leaving the onerous task of determining how to pay for the $447 billion plan to the 12 bipartisan members of Congress is a tall order. They need to worry about increasing tax revenue, rethinking sacred entitlement programs, and reducing the deficit. It’s a huge to-do list for a group of politicians who have until Thanksgiving to find their inner Superman.

More than anything, Obama’s speech, along with the opening salvos from the super committee on Thursday, seemed to indicate, at least on the part of the Democrats, a shift away from deficit reduction toward spending in an effort to boost the stalled economy.

It’s a move that tracks with the American public’s perceptions, according to the results of a Pew Research Center poll released on Thursday. In January, a similar Pew poll showed that 64 percent of the public cited deficit reduction as the top political priority for 2011. In September, that number had dropped to 22 percent.

“We have a fiction that we’re going to get serious about our debt,” Douglas Holtz-Eakin, a former director of the Congressional Budget Office and an economic adviser to Republican Sen. John McCain’s 2008 presidential campaign, said at the Brookings discussion. “I’m enormously disappointed that the president passed on the buck.”

Peter Peterson, co-founder of the Blackstone Group and founder of the Peter G. Peterson Foundation, an organization dedicated to fiscal sustainability issues, said that creating jobs “in both the short term and long term should be a top priority for our nation.”

“The most effective way for any stimulus program to succeed is as part of a long-term fiscal plan, because it would bring sorely needed confidence to our fragile economy,” Peterson said. “America needs to demonstrate that it is getting its fiscal house in order so that the businesses, banks, and investors with trillions in available capital have the confidence to deploy it.”


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