The Bold Second-Term Agenda Obama Should Unveil at the Second Debate

It's called the American Jobs Act, and he announced it back in 2011.


President Obama is having trouble with that vision thing.

While he certainly has a long list of first-term accomplishments, the most that can be said about what he wants to do in a second-term seems to be protecting his accomplishments from the first. As Timothy Noah of The New Republic argues, making sure that Obamacare and Dodd-Frank get implemented actually is a substantive, even historic, agenda -- but playing defense is hardly the stuff of inspirational politics. You need a list of things you want to do, not just keep from happening, when you make your case to voters.

Which brings us to the payroll tax cut.

The payroll tax is scheduled to go back to its non-holiday level next year, and lawmakers seem content to let it happen. That's a huge mistake. Goldman Sachs chief economist Jan Hatzius estimates the payroll tax cut expiring will hurt the economy just as much as QE3 will help it. My colleague Derek Thompson argued Mitt Romney should champion a further extension as a way to champion the interests of the middle class, but the same is equally true of Obama. Not that Obama doesn't already support it, maybe.

Remember the American Jobs Act? It was the package of tax cuts, credits, and infrastructure spending Obama announced last fall -- just don't call it stimulus! -- that promptly died a quiet death in the Republican House. The independent analysts at Macroeconomic Advisers calculated the bill would have created an additional 1.3 million jobs in 2012, and another 800,000 in 2013. A big part of this boost would have come from extending and expanding the payroll tax cut. Remember, employees and employers each pay half of the payroll tax, although only the employee side has been cut in recent years. The American Jobs Act would have continued the employee side cut, and added a 50 percent cut to the employer side -- with a complete cut, up to $50 million, for firms that increased jobs or salaries. This would have gotten the economy moving again as much as any tax cut can do so -- in other words, there's a much bigger bang for the buck from the payroll tax cut than from others. The chart below from the left-leaning Center on Budget and Policy Priorities puts this in perspective by comparing the costs and benefits of the current payroll tax cut with those of the high-end Bush tax cuts.

Does Obama still support the constituent parts of the American Jobs Act, including the payroll tax cut? He should say. A credible plan to bring down unemployment faster -- a test Romney hasn't exactly passed -- is the kind of forward-looking agenda he hasn't explained clearly and the kind of forward-looking agenda voters want to hear.

It's certainly not morning in America, but Obama has a plan, with numbers even, to get us there. He has to remind voters of this. Himself too.