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The American Prospect

Feeble President, Feeble Plans

Obama’s jobs plan: Go work for free!

On Wednesday, I posted an item titled “How Not to Solve the Jobs Problem.” The case in point is President Barack Obama’s embrace of a state program called Georgia Works, which tries to turn unemployment insurance into a kind of sing-for-your-supper “workfare” program.

Jobless workers in Georgia drawing unemployment compensation are encouraged to go work for private employers—for free—in exchange for some kind of training. They get a small onetime stipend of $240 as an inducement. The premise is that working for free will help them get a foot in the door and maybe get hired (if the employer hires). According to Georgia’s own statistics, however, only about 15 percent do.

This pitifully inadequate program is very likely to be part of Obama’s forthcoming jobs speech.

But let’s drill deeper. Why is the administration embracing such a right-wing and futile program? Obviously, the problem in Georgia is the unemployment rate, of 10.1 percent, not the fact that unemployed workers lack a few weeks’ training for low-wage jobs.

For starters, sources close to the White House say the president and his political advisers are terrified that the Republicans will block an extension of unemployment insurance, except in exchange for draconian cuts in other social programs. They hope that if they extend this feeble olive branch, Republicans might go along. My sources, however, say no such deal with the Republicans has been struck.

Second, Obama has given away so much in budget deals that the cupboard is bare. The unemployment funds—which are so underfunded that 11 states are being forced to cut back on benefits despite double-digit unemployment—are only a small pot of money that can be raided.

But if Republicans are threatening to block extension of unemployment insurance, at a time when 25 million Americans are unemployed or unable to find full-time work, a president with an ounce of political intelligence would be screaming from the housetops, not throwing pitiful bones.

How dare Republicans threaten to refuse to extend unemployment coverage with tens of millions out of work? What kind of callous people are they?

For that matter, how dare Republicans play cute with funds for flood-ravaged Vermont and upstate New York, demanding cuts in other outlays before they approve emergency aid?

How dare Speaker John Boehner, for the first time in the history of the Republic, refuse to honor a request from the president of the United States to address a joint session of Congress? And of course, Obama agreed to change the date.

His slogan might as well be “Kick Me.”

Maybe Obama should have invited members of Congress to listen to him speak at the Lincoln Memorial, as Marian Anderson did in 1939 when the Daughters of the American Revolution refused to let the African American contralto perform at Constitution Hall. That would have poked a stick in Boehner’s eye and won some points for moxie.

But this president doesn’t do moxie. And his advisers don’t recommend it—because he has weeded out political counselors who advocate tough, principled partisanship in the face of Republican extremist obstruction.

There are also credible reports that, in the next round of budget talks—remember, Obama went along with a deal requiring at least $1.2 trillion more in cuts or no debt extension—Obama will agree to an increase in the Medicare age, as well as an adjustment in the cost formula that is a disguised cut in Social Security over time.

Here again, a president with nerve and principle would be taking Republican demands for cuts in Medicare or Medicaid or Social Security and using them as teaching tools.

Last week, Jonathan Alter, a columnist and author of a very friendly and wishful Obama biography, published a column in Bloomberg Businessweek titled, “You Think Obama has been a Bad President? Prove it.”

Alter cites the usual alibis—Republican blockage, the fact that Obama faced a deeper-than-anticipated economic crisis, and so on. He writes: “And if you were president and a group of extremists was pointing a gun at the head of the American economy, what would you have done?”

Well, Alter also wrote a book on Franklin Roosevelt, so he should know. You don’t keep on preaching sweet reasonableness. You call out the extremists on their sheer craziness and disdain for solving the crisis. And you move public opinion to your side.

What you don’t do is meet the opposition 90 percent of the way, put forth your own programs lacking in credibility, much less validate the other side’s ideology and talking points. Then maybe your party gains seats rather than suffering a record loss.

Which brings me back to Georgia Works. Last year, the Department of Labor put out an advisory notice clarifying what kind of training programs are consistent with federal minimum-wage laws. Guess what? Georgia Works, and a similar sing-for-your-supper program in New Hampshire, violate the Fair Labor Standards Act by encouraging unemployed people to work for free. The Labor Department, however, has taken no further action and has been prudently silent in the face of Obama’s embrace of Georgia Works.

One other depressing detail. The real problem with unemployment insurance is that it fails to provide enough coverage and that state funds are going broke in the face of a prolonged jobs recession.

The idea of tapping these funds, turning unemployment into more of a welfare program, and leaving it to workers to cover more of their own risk of unemployment is a favorite of the Hamilton Project, a creation of former Treasury Secretary Robert Rubin. The Obama staffer promoting Georgia Works as a dandy idea for Obama to embrace is Jason Furman, Rubin protégé and former director of the Hamilton Project.

So in a deepening crisis, feeble center-right policy ideas from the White House rendezvous with a president temperamentally unwilling to fight for principles—that are themselves increasingly murky.

The result: a Republican Party whose actual views on key issues represent maybe 25 percent of Americans keeps blocking the president, and may well sweep the next election in spite of its extremism.

Robert Kuttner

Robert Kuttner

Robert Kuttner is co-founder and co-editor of The American Prospect magazine, as well as a Distinguished Senior Fellow of the think tank Demos. He was a longtime columnist for Business Week, and continues to write columns in the Boston Globe and Huffington Post. He is the author of A Presidency in Peril: The Inside Story of Obama's Promise, Wall Street's Power, and the Struggle to Control our Economic Future, Obama's Challenge, and other books.

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