Job Creation Vs. The Deficit Fearmongers

House of Representatives staffers who take the District's subway system to work are now confronted with a host of scary images as they exit the station: A forlorn Uncle Sam panhandling to pay off a $12 trillion debt; a stopwatch with the message that it would take 31,000 years for that stopwatch to tick off one trillion seconds, a poster with 16 digits symbolizing the debt, down to the penny, stretched across the station entrance.

The display is part of the latest campaign by Rick Berman, the hired gun who uses a flurry of front groups to peddle right-wing propaganda messages. It coincides with a push from Senate conservatives from both parties—Sen. Kent Conrad, D-N.D., and Sen. Judd Gregg, R-N.H.—to create a deficit-reduction commission with extraordinary powers to force an up-or-down vote on Draconian budget-slashing.

The problem with this, as was pointed out Wednesday in a conference call that featured Rep. Keith Ellison, D-Minn., and two economists, that such a commission would likely choke off the very programs needed to keep the economic recovery moving forward—and would likely have the effect of making the deficit problem even worse.

This is the heavy backdrop for the Thursday White House jobs summit, where the nation is being forced to choose between fear of the deficit and the reality of sustained unemployment if our political leadership gives into fear-induced paralysis.

To counter what is becoming an incessant drumbeat of apocalyptic messages about the nation's debt, more than 40 organizations have signed onto a letter denouncing the proposed deficit commission. "We write in strong opposition to proposals to create an entitlements or deficit-reduction commission that would override the normal legislative process and replace it with expedited procedures prohibiting amendments and limiting debate," the statement reads.

Asserting that such a commission reflects a "desire to avoid political accountability" for cuts to Social Security and other social safety-net spending, the statement says that Americans "will undoubtedly be suspicious of a process that shuts them out of all decisions regarding the future of a retirement system that's served them well in the current financial crisis."

But economist James Galbraith said that another reason the commission is in his words "pure mischief" is that it ignores the reality that "the budget deficits are the medicine that has kept the economy from completely imploding over the year of the great crisis. They are the life support system that has provided stabilization that has already occurred to some degree. It is not appropriate when the patient is on a regime of life support to criticize the medicine and the equipment that is keeping him alive."

AFL-CIO Policy Director Thea Lee, along with Ellison, are embracing a five-point jobs program that would include direct federal spending on public-sector jobs, along the lines of the Works Progress Administration of the 1930s or the Comprehensive Employment and Training Program of the 1970s.

Ellison said that a $40 billion program that would pay for a range of activities from repairing schools to cleaning up foreclosed and abandoned properties would create 1 million full-time jobs. "This kind of measure has ample precedent. We've done it before, and if there is ever a time when we need to do it again, that time is now," Ellison said.

Other job-producing actions could take advantage of existing funds or already-planned initiatives, Lee said. $40 billion in unspent Troubled Asset Relief Program funds can be designated for loans to small businesses with the understanding that the loans would be used for hiring and expansion. A surface transportation reauthorization bill due to be approved by Congress in the coming months can also be targeted, and appropriately funded, to encourage rapid job creation. Later Wednesday, Rep. James Oberstar, D-Wis., the chairman of the House Transportation and Infrastructure Committee, announced that highway and public transit organizations had assembled a list of nearly 10,000 "ready-to-go" infrastructure projects worth more than $69 billion. That's on top of 10,600 projects that have already been funded under the Recovery Act stimulus program passed earlier this year.

The bottom-line question as the job summit unfolds is who will exert the leadership that will go against the political wind to say that the way to address the nation's very real deficit problem is not by following the example of FDR in 1936 or Japan in the 1990s, two famous cases in which budget tightening left gestating recoveries stillborn. It should come from President Obama himself, who will wake up Friday morning to a jobs report from the Labor Department that will underscore the misery of the Main Street economy. But if it will not come from Obama, it should come from the pressure the rest of us apply on Congress.

Views expressed on this page are those of the authors and not necessarily those of Campaign for America's Future or Institute for America's Future