Tuesday, June 7, 2011

Democrats Dropped the Ball on Jobs — To Pass a Job-Destroying Law

In his CongressDaily column this morning, Charlie Cook analyzed how in early 2009 Democrats “pivoted too quickly” from the economy “to addressing climate change and health care.  These were the signature issues in voters’ minds that defined the legislative objectives of Obama and the Democratic Congress.”  He goes on: “One can argue that there was a reticence [by Democrats] to spend too much political capital” on fixing the economy “because they wanted to hold it back” to pass a major health care bill.

Even former Obama Administration officials admit that they “dropped the ball” when it came to focusing on the economy in the fall of 2009.  Here’s how former Council of Economic Advisers Chairman Christina Romer described it in a speech last month:

The Administration and Congress should have done more in the fall of 2009 and early 2010 to aid the recovery.  I remember that fall of 2009 as a very frustrating one.  It was very clear to me that the economy was still struggling, but the will to do more to help it had died.

After the town hall meetings that dominated August of 2009, Democrats could have decided to abandon their unpopular health care bill, admit the “stimulus” had failed to reduce unemployment, and work with Republicans on solutions to create jobs – for instance, the payroll tax holiday included in last December’s tax agreement, or rolling back regulations that harm American job creators.  Instead, the Democrats proceeded to spend the remainder of 2009 – and the entire first quarter of 2010 – ramming through an unpopular 2700-page measure.

It’s worth pointing out the nearly $800 billion in higher taxes in the law aren’t likely to help American job creators.  In fact, the non-partisan Congressional Budget Office has previously noted that 800,000 fewer jobs will exist thanks to the law’s perverse incentives, which discourage work.  But Obamacare has harmed the economy in a second way – namely, the opportunity cost of Democrats’ single-minded devotion (some would argue obsession) to passing a health care bill at all costs, despite the fact that unemployment was (and remains) at 26-year highs.  These twin effects – Democrats’ sins of both commission and omission – stand as one of the major economic legacies of the Obama Administration.