Bill Clinton to the Rescue
It’s Labor Day 2011, and all eyes are on the economy—both the stubborn 9.1 percent unemployment rate and President Obama’s upcoming “job creation” speech in front of a joint session of Congress.
There’s evidence that Obama may be looking for inspiration from Bill Clinton—and Newsweek readers might have gotten a sneak preview.
Back in June, Clinton penned a 14-point plan for job creation in a Newsweek cover story. Given that President Obama has promised new ideas in this speech, it is perhaps not surprising that some of the trial balloons that have been floated reflect more than a passing familiarity with Clinton’s advice. After all, he was the last president to lead America out of recession, turning a deficit into a surplus, while wrestling with a Republican-controlled Congress and getting decisively reelected.
Two ideas floated by administration officials in August—retrofitting commercial buildings to make them more energy-efficient and incentivizing engineering degrees—track closely with Clinton’s proposals. In the article, Bubba cited retrofitting recently done to the Empire State Building to make it more energy-efficient, creating jobs whose work ultimately paid for itself in the building’s energy savings. Likewise, in a look at how we can bring manufacturing back to the U.S. and utilize community colleges more effectively, Clinton emphasized that engineering education could strengthen U.S. strategic competitiveness and our workforce for decades into the future.
In his barnstorming Iowa bus tour, Obama spoke in favor of ratifying trade agreements with countries like South Korea and Colombia. This is a policy Republicans should philosophically agree with—and more liberal Democrats might be swayed if Obama takes Clinton’s advice to ensure that trade agreements are more effectively enforced. As Clinton pointed out, his administration passed more than 300 trade agreements—but because we were not a debtor nation at the time, we could afford to enforce trade regulations more effectively against countries, like China, that are now our creditors. It’s tougher to wield a big stick when you’re also asking for cash.
In addition, Obama has indicated support for cutting the corporate tax rate—long a priority of fiscal conservatives—in exchange for closing loopholes, a common-sense trade backed by Republicans in the past. This shift—advocated by both Clinton and CEOs like Cisco’s John Chambers in a memorable 60 Minutes interview—should help companies start reinvesting some of their sidelined cash back in the United States.
In his article, Clinton offered innovative ideas that should have bipartisan appeal: from tax credits for startup companies in specific strategic industries, like battery technology, to incentivizing bank loans for small businesses and civic projects. In addition, there is bipartisan support in the Senate for a public-private infrastructure bank—a hallmark approach of the Clinton administration that draws on third-way thinking while translating directly to job creation. Likewise, extending the payroll-tax cut should be a no-brainer to all but the most cynical conservative hyperpartisan bent on opposing Obama, even on tax cuts.
Part of improving the business climate will also require putting the U.S. on more stable fiscal footing—and that means bending the long-term budget cost curve. In his speech, the president is expected to challenge the so-called supercommittee to reach beyond its $1.5 trillion cut mandate by proposing both tax and entitlement reforms. Offering specifics would help Obama regain credibility, especially on areas like means testing and indexing Social Security for inflation. But massive cuts from strategic discretionary-spending investments should be postponed for another year to allow the economy to stabilize—a point on which both Bowles-Simpson and Bill Clinton agree.
But perhaps the biggest advice Obama can take from Bubba is a hallmark of Clinton’s presidency—a laserlike focus on rebuilding the great American middle class.
The forgotten middle class has been getting squeezed on both sides for more than a decade. Its strength reflects the strength of America directly. When it feels optimistic about the future, America is more confident. And not incidentally, the middle class determines who wins elections in America. Its members are the people who will most benefit from intelligent government action that incentivizes private-sector investment. That’s not big government, it’s smart government.
Bill Clinton always spoke directly to the hopes and concerns of middle-class Americans—he was their champion in their White House, one of us in the Oval Office. But Barack Obama did not make appeals to the middle class a core of his 2008 campaign. In his last State of the Union speech, however, he got the memo—mentioning the “middle class” 16 times by my count. In sharp contrast, during the last GOP presidential debate, no candidate mentioned the words “middle class.”
If Barack Obama wants to take a page from Bill Clinton’s successful approach to reviving the economy, the president should take a look at his predecessor’s policies as well as his politics. Bubba offered memorable slogans backed by real policy plans, expressed in terms that people at home could understand. Borrow great ideas, especially from the other side of the aisle, with full credit—that makes it harder for the opposition to oppose. Then make them your own. And above all, focus on the forgotten American middle class.
These are the core ideas that can animate a high-stakes jobs speech at a time when President Obama’s economic credibility as well as his reelection prospects are at stake. The president needs more than a great speech—we are past the time for pretty words. Bold bipartisan policy solutions are the key to his regaining credibility on the economy.