WASHINGTON (AP) — First, do no harm. Economists say the most important part of the jobs plan President Barack Obama will unveil Thursday night is the renewal of two measures already in place — a cut in Social Security taxes and emergency aid for the unemployed.
His new proposals, like spending more for transportation projects and cutting taxes for companies that hire the unemployed, probably wouldn’t add many jobs, they say. Not soon, anyway.
“These are not bold, new, big programs,” says Nariman Behravesh, chief economist with IHS Global Insight. “You put everything together, it’s going to be pretty small.”
The job market needs big help. In August, the economy generated zero job growth. And the unemployment rate is 9.1 percent, a level more typical for a recession than for a recovery in its third year.
For Obama, who also faces sinking approval ratings as he goes before a joint session of Congress and on national TV, the options are limited. Congress must approve any new measures, and congressional Republicans oppose new spending.
“Anything that would be of a big enough size to really help the labor market is going to have trouble getting through Congress,” says Michael Hanson, senior economist at Bank of America Merrill Lynch. “And anything that can get through Congress will be too small to be much help.”
Federal Reserve Chairman Ben Bernanke, International Monetary Fund chief Christine Lagarde and other economists have urged Congress to do more to help job growth and the economy over the next year or two — and worry about cutting spending later.
Economist Barry Bosworth of the Brookings Institution, for example, says the government needs to spend $700 billion to $800 billion a year to generate healthy job growth.