Everything is speculation and off-the-record musings until we actually hear the speech and see the proposals shipped off to Congress, of course, but early indications (I'm working off of the NYT here and here, as well as Politico) are that the jobs package will be:
* a one-year extension of the payroll tax cut ($100-200bil) with long-term deficit offsets * extension of expiring unemployment benefits ($70bil) * a tax benefit to businesses that hire the unemployed ($30bil) * investment in infrastructure: roads, rails, airports, schools ($50bil)
The major portion, therefore, is a tax cut. It is neither his preferred tax cut (that would be the Making Work Pay tax credit, which was rejected by Republicans previously) nor his preferred measure overall (the CBO and the administration's economists agree that spending would have more of a return). It is the main element because, once again:
...it is the one that they figure has the best chance of getting Republicans' support.So he has pre-negotiated away his preferences. And will the Republicans back him?
No, of course not, and they've already said so:
Two top Republican lawmakers said Wednesday they don't support extending a payroll tax cut as a way to stimulate the economy -an idea the White House is weighing– because they don't believe it helped create jobs and that money is needed to shore up Social Security and Medicare.Republicans don't want to cut your taxes. They want to cut rich people's taxes. So this is not a speech to communicate an opening proposal to the majority party in Congress. There are plenty of other channels to do that that don't involve national television. Additionally, Congress has already refused this proposal.
The primary value of this speech is as the political definition of the Democratic jobs program, addressed not to Congress but to the electorate.
Democrats are urging the President to go bigger. Economists are urging the President to go bigger. Basic macro says that spending now is more useful than tax cuts. Getting the unemployed back into jobs, even if those jobs are digging holes and filling them in, prevents long-term unemployment and the atrophy of work skills. Many employers are only looking to hire people who are currently employed -- which a direct jobs program would provide.
During the Great Depression, agencies like the Civilian Conservation Corps and the Works Progress Administration kept Americans employed, put bread on tables, and produced infrastructure projects that are still standing today. Their contribution to the American economy was vital, and their continuing contribution to the American identity is powerful. These are part of the legacy of the Democratic Party, and they can be a powerful part of the Democratic identity in 2012.
The agencies have been directly referenced by senior Democrats pushing the President to take a bold stand:
The House Democratic leader, Nancy Pelosi, and her lieutenants called on the president to propose a federal "infrastructure bank" to help finance construction of roads and bridges and other public works; a federal program to hire construction workers to make homes more energy efficient; and a new program like the Civilian Conservation Corps, to hire young people to work for the Agriculture Department and the Federal Emergency Management Agency.Representative Xavier Becerra of California, the vice chairman of the House Democratic Caucus and a member of the new deficit reduction panel, said the president must "be bold" in his speech.
America's infrastructure is aging. Roads, water systems, the electrical grid, and school buildings can all use immediate attention that would employ labor, activate capital, and demand material and services from companies that are stagnating for want of customers. The President and his staff have 36 hours to edit this speech: if Congress wants to sit on its salary like a toad on a rock and refuse even tax cuts -- tax cuts! -- to stimulate the economy, then the most productive thing he can do with this speech is get Democrats elected. Voters should have the image in mind that "If you re-elect Obama and elect a Democratic House, we will hire anybody willing to swing a hammer. Those hammers will be fixing your child's school. And America can be first out of the gate when the global economy starts ticking toward recovery again. Democrats did it once. We can do it again."
I know the President doesn't surf Kos. Maybe a White House intern is flipping through diaries and tallying up trending topics; maybe someone's checking the pulse of the base in response to trial balloons they floated in the news. Hey staffer: put this one down as a tick mark in the column for "listen to Nancy."