Breaking Down the Issues: Jobs and the Economy
The Democratic National Convention had barely ended when the government issued its August jobs report. Decoding a jobs report is an inexact science, but the overall conclusion is that the U.S. economy added fewer jobs in August than in previous months. The unemployment rate fell slightly, but even that was not good news. The drop occurred because many jobless Americans had given up looking for work. (The government does not count people who are not looking for work as “unemployed.”)
Unemployment is down from its 10 percent+ levels at the height of the nation’s economic crisis in 2008 and 2009. However, it’s hovered around 8 percent for about three years now, the longest stretch since the government began keeping monthly records in 1948.
That trend, combined with the fact that no president since the Great Depression has been reelected with a jobless rate that high, and polls showing that the economy is voters’ number-one concern, has caused President Barack Obama and Mitt Romney to focus on this issue.
President Obama calls for the nation’s economic goals to be far more ambitious than merely recovering from the nation’s prolonged recession. The president’s plans for achieving “an economy built to last” focus on innovation, education, and increased support for American workers and businesses.
- Obama aims to create jobs, lower energy costs, and reduce the nation’s dependence on foreign oil by encouraging and increasing the use of clean coal technology and wind power. His plans also include tax credits to encourage companies to develop or adopt such innovations.
- Obama’s Moving Ahead for Progress in the 21st Century Act (MAP-21), signed in July, restores funding for several infrastructure projects including roads, railroads, bridges, and highways. In addition, the president seeks to modernize the nation’s electric power grid and to expand access to high-speed broadband communication. This construction will be funded in part by money saved by ending the war in Afghanistan.
- Obama looks to fund education differently in order to enhance educational quality and increase graduation rates. His plan seeks to expand financial aid for college students and double the number of federally funded work-study jobs over the next five years.
- He will also continue to build on workforce investment and find innovative and efficient ways to retrain unemployed workers and return them to the workforce.
- The president plans to provide tax credits for companies that bring jobs back to the United States from overseas. He will also give tax credits to companies that invest in communities with high unemployment rates.
- Further, Obama aims to reduce the regulatory burden on companies in order to promote growth, competitiveness, innovation, and job creation. This will include stricter enforcement of trade regulations against countries and foreign companies that engage in unfair competition with American businesses.
- Obama plans to reform the nation’s tax code by closing loopholes for millionaires and billionaires. This involves cutting corporate tax rates and using the tax code to reward companies that pursue innovation and invest in America.
- The president will cut discretionary government spending to help reduce the federal deficit and provide for economic growth.
Some of the positions taken by Mitt Romney are similar to those taken by Obama. However, where the two differ, they do so in significant ways. Romney’s plan, “Believe in America,” is more specific on many topics than is Obama’s plan, and focuses on addressing policies and programs from the president’s first term.
- Romney plans to stop the federal government from doing things that the nation cannot afford. This includes, for example, repealing Obamacare, reducing foreign aid, and cutting federal funds for family planning programs. Medicaid and government worker retraining programs should be capped, and money should be given to the states to spend in these areas according to their specific needs.
- Romney’s plans aim to educate and train (or retrain) American workers to make sure that they have the skills needed to match the jobs in today’s economy. He will increase the supply of highly skilled workers by lowering the restrictions on foreign workers with such skills who wish to immigrate to the United States.
- Romney will allow those foreign students who graduate from American colleges with degrees in math, science, and engineering to remain permanently in the United States.
- Romney calls for weakening the power of labor unions, adding that no worker should be forced to join a union.
- Romney plans to pursue more free trade agreements with other nations in order to open new markets for American products, to create jobs in the United States, and to stimulate economic growth. (The three trade agreements with Colombia, Panama, and South Korea signed by President Obama in October 2011 were originally negotiated under President Bush, as Condoleezza Rice alluded to in her August 29 speech before the Republican National Convention.)
- At the same time, Romney calls for increasing enforcement of existing trade regulations and punishing China for its unfair trade practices toward the United States.
- Romney aims to cut individual income tax by 20 percent to encourage savings, investment, work, and entrepreneurship. He further aims to reduce the corporate tax rate to 25 percent and strengthen tax credits for companies engaged in research and development.
- Romney also seeks to reduce government regulations that are seen as prohibitively costly to businesses.
- Romney supports implementation of a law, similar to the REINS (Regulations from the Executive in Need of Scrutiny) Act now before Congress, that would require all “major” regulations (i.e., those with an economic impact greater than $100 million) to be approved by both houses of Congress before taking effect.
- Romney looks to work with Congress to cap federal government spending at 18 percent of the nation’s GDP.
- In an effort to reduce federal bureaucracy, Romney plans to reduce the size of the federal workforce by 10 percent by only hiring one new worker for every two who quit or retire. He will consolidate federal agencies and streamline processes to improve results and cut costs. In addition, he will adjust federal workers’ pay and benefits to reflect those of workers doing similar jobs in the private sector.
Now that you’ve read about the candidates’ positions on jobs and the economy, ask students these questions:
- Recall What is one of the sources of funding for the MAP-21 bill?
- Draw Inferences Why might workers need to be retrained to reenter the workforce?
- Predict Consequences What might be the reaction of federal employees who read about Romney’s plan to consolidate and streamline federal agencies?
- Summarize How does easing regulations on companies promote growth, competitiveness, innovation, and job creation?
Do you agree with Romney’s plan to allow foreign students who graduate from American colleges with degrees in math, science, and engineering to become permanent residents of the United States?