Amid widespread concern over U.S. fiscal health, the president needs to retool his communications strategy -- and maybe his platform
Nearly halfway into his speech from the State Dining Room on Monday, President Obama finally launched into what amounts to his core job-creation message these days. He ticked off a familiar trio of policy initiatives - extend unemployment benefits and the temporary payroll tax cut, and spend more on infrastructure - and then blamed congressional Republicans for not enacting them.
"These are all ideas that, traditionally, Republicans have agreed to, have agreed to countless times in the past," Obama said. "There's no reason we shouldn't act on them now. None."
Markets were unmoved. Stocks fell before the midday speech, and they kept right on falling afterward.
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No one should have been surprised. Obama needs a sharper, weightier economic message - and perhaps, many of his ideological allies suggest, a revamped policy plan as well.
Here's why the president is struggling to get through: There appear to be two key fears driving investors and businesses. First, fear about the erosion of the U.S. and global recoveries, which are rooted in economic fundamentals and seemingly immune to any presidential speechifying.
Concern is widespread, voiced by Standard & Poor's in its downgrade of U.S. debt on Friday, that Washington lawmakers have lost any ability to work together to solve tough economic problems. As the National Federation of Independent Business said on Tuesday, in releasing another survey showing a glum outlook from small-business owners, "for all the activity in Washington, D.C. ... they have done nothing but create a sizable helping of anxiety -- exactly what we don't need."
Obama's message, "I've got all these great economic ideas, but Congress won't play along," would seem to only inflame that concern.
"The president believes we need to tackle our deficits over the long term so we have more room to implement key proposals, including investments in education and innovation, that will help the economic grow faster," Jen Psaki, the White House deputy communications director, said. "But there are also bipartisan steps we can take now" - including patent reform, the payroll-tax-cut extension, three pending free-trade pacts, and infrastructure spending - "and it is in the hands of Congress to act on moving these forward."
Part of Obama's struggle is that, despite his much-touted push to "pivot" to jobs after the end of the debt-ceiling fight, he is still talking first and foremost about deficits. The first 650 words of his 1,500-word speech on Monday centered on the S&P downgrade, the details of the debt-limit deal, his willingness to talk about reducing social-safety net spending, and his commitment to stay on deficit reduction "until we get the job done." Obama's other problem is the simplicity of his opponents' message. Everyone knows the Republicans' economic mantra: Cut spending, create jobs, don't raise taxes. There's little economic evidence to suggest such an "expansionary austerity" plan will work - but the rhetoric is dynamite.
Administration officials hint strongly that Obama's next messaging move is to take Republicans head-on in the court of public opinion. He'll attempt to engineer a repeat of the grassroots-pressure strategy he executed in the debt fight, when he used his bully pulpit to urge voters to phone their members of Congress and demand compromise - a move that jammed Capitol switchboards - but didn't appear to alter the terms of the bargain he struck with Republicans.
Jared Bernstein, a former Obama economic adviser who is now a senior fellow at the Center on Budget and Policy Priorities, said that a grassroots strategy is the president's best bet - and that it should be themed on a simple policy plan. (Bernstein would go with a plan he calls FAST!, which would pump billions of dollars into maintenance and retrofit projects at local schools across the country.)
Obama needs to "latch onto one big, visible idea that will create a lot of jobs," Bernstein said. "Argue your heart out for it. And if the opposition gets between you and action on jobs, tell the American public who's blocking you."
Other left-leaning economists advise an even bigger policy shift.
"He needs more than a message," said Robert Shapiro, a former Clinton administration economic adviser who now runs the consulting firm Sonecon. "He needs a fresh program that provides a narrative of how his continued leadership will lead to much stronger job creation, income gains, and growth than we're seeing today. This would entail, for example, cuts in payroll taxes on both sides and a serious plan to bring down foreclosures and stabilize housing prices."
Michael Mandel, the chief economic strategist at the Progressive Policy Institute, said that Obama must rethink his economic approach entirely - starting by jettisoning the notion that more tax cuts or spending to stimulate demand will actually boost the recovery. (Mandel contends that pumping more money into the economy largely helps Americans buy more imported goods, creating jobs overseas but not at home.)
"His message should be: We've come to a fork in the road," Mandel said. "We have deep structural problems. Our production base is eroding, our innovators are being tied up with regulations, and we have an investment shortfall. I will do whatever I can to fix these problems." Mandel added, "But the first thing he has to do is admit that the economy has problems that can't be solved by demand stimulus, including a growing competitiveness problem that's not going to go away."
Administration officials suggest that Obama probably won't shift his message or his policy much, if at all, until Congress returns after Labor Day.
Presidents, after all, don't typically roll out big new plans in August.
Then again, this isn't a typical August.
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