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Job Creation: The No. 1 Issue, With a Bullet

But There Are Really Different Ideas for Ending Era of Stagnation

Washington, which cherishes its civic and political traditions as much as any capital, has recently found a new ritual in which to participate. On the morning of the first Friday of every month, the Congressional leaders of both parties solemnly await word from the Bureau of Labor Statistics on how U.S. employment fared in the latest month. And within seconds of the jobs report’s release, at 8:30 sharp, an intense sparring match breaks loose, with Democrats and Republicans eager to put their spin on the number of new payroll positions created (or lost) the previous month and the new unemployment rate.

When the numbers are bad, or at least worse than expected — as they were in June, when a net of only 80,000 jobs were created — Republicans pounce, eagerly blaming President Barack Obama’s policies as the main drag on the economic recovery. Democrats are left to accuse the GOP of craven obstructionism and an unwillingness to cooperate to enact the president’s job-boosting legislative package.

When the numbers are good, or at least better than expected — as they were in long-ago February, when there were 259,000 new jobs — Democrats have the chance to applaud the encouraging news, while cautioning there’s more work to be done and that their side is the one more likely to do it. Republicans are left to remind voters that the economy remains weak, that the jobless rate hasn’t been below 8 percent during the Obama presidency and that they have very different ideas from the Democrats for turning the situation around.

What doesn’t change is that politicians in both parties, from the House and Senate leadership down to the challengers in swing districts, are seizing on the debate over job creation as perhaps their singular reason for running. It’s the issue most prominent in voters’ minds, and both sides believe they have reason to claim the advantage.

Republicans are eager to exploit anxiety with the sluggish economic recovery and are blaming legislation passed by the previously Democratic Congress — including the economic stimulus of 2009 and the health care and financial industry regulatory overhauls of 2010 — for dragging down the economy. To spur job creation, GOP candidates are proposing tax cuts and a regulatory rollback.

Democrats are touting proposals to boost U.S. competitiveness while also aiming to pin charges of obstructionism on the GOP. In particular, Democrats accuse Republicans of blocking efforts to boost the economy by not taking up Obama’s American Jobs Act, which includes money for infrastructure projects and to help states and cities create more positions for teachers, police and firefighters. (Month after month, declines in the number of government workers have been a drag on the overall gain in the number of jobs.)  

GOP on Offense

After the June numbers were released, House Majority Leader Eric Cantor blasted Obama and sought to frame the upcoming elections as a referendum on Democrats’ policies. “Heading into November, there is a clear choice about the direction this country will take and two very different visions for the way forward,” the Virginia Republican said. “Will we stay the course and choose more of the same big-government spending and tax hikes to pay for policies like Obamacare and so-called stimulus, or will we turn to real pro-growth solutions that will empower small-businessmen and -women to succeed, grow and hire?”

This summer, House Republicans have held or plan to hold a number of votes on legislation that stands no chance of enactment, but that their incumbents — 221 members of the caucus, or 92 percent, are running for re-election — can tout to drive home the GOP’s jobs message. Last week was legislation to freeze the writing of any new federal regulations until unemployment drops to 6 percent. This week the marquee legislation would extend all of the George W. Bush-era tax cuts for the coming year, which Republicans say is necessary to shield “job creators” from a significant tax hike that will happen next year absent any Congressional action. (They note that many small businesses would be subjected to the higher income tax rates Obama wants on income above $250,000.) And earlier this month was the vote in favor of repealing the 2010 health care reform law, which Republicans deride as a financial anchor on the ankles of big and small businesses alike.

GOP House Members, whether in swing or safe districts, have embraced these themes with almost unanimity. “Washington has created this cloud of uncertainty. Whether it be cap-and-trade, the effects of the health care bill, whatever it may be, small businesses are not investing back in their business,” freshman Rep. Robert Dold of suburban Chicago says in a recent television advertisement. “Added to that, Congress is about to implement one of the largest tax increases in a generation.” (Dold is a decided underdog in a redrawn district; his opponent, Democratic businessman Brad Schneider, favors allowing the Bush tax cuts on “the wealthiest Americans” to expire.)

Republican Senate incumbents and challengers also are hammering the health care law and Obama’s broader regulatory scheme.

“I do want to be the deciding vote to repeal this health care tax law,” George Allen, the former Virginia Senator and governor, said during a recent campaign swing through Roanoke. Allen was visiting workers at Lloyd Electric Co., which provides industrial products to manufacturing firms, to talk about his concerns with regulations weighing down small businesses and job growth.

As part of his “Blueprint for America’s Comeback,” Allen promised to push for legislation to require Congressional approval for any regulation with an economic impact of more than $100 million. Such legislation was passed by the House in December but is a dead letter in the Senate so long as the Democrats are in charge.

Allen has made support for low taxes a central plank in his jobs-focused platform. He wants to extend all the Bush tax cuts for individuals — arguing that to do otherwise would further depress job creation — and also favors a lower corporate income tax rate. “With 41 consecutive months of national unemployment over 8 percent and underemployment around 18 percent, the last thing Congress should do is raise taxes,” Allen said at a meeting this month with the Mount Vernon-Lee Chamber of Commerce.

Democrats Counterattack

Tim Kaine, another former governor and a former national Democratic Party chairman, has also made job creation the centerpiece of his campaign for Virginia’s open Senate seat — but, not surprisingly, he’s going at it from a very different angle. Like so many other Congressional candidates who are emulating the president, his buzzword is “competitiveness.”

After touring the Herndon headquarters of Fibertek Inc., which makes lasers for the military, Kaine held a town hall event two weeks ago where he laid out his plans for strengthening the U.S. economy in an increasingly competitive world. The company is “a great example of what Virginia has done right and what the nation needs to do right if we’re going to strengthen our economy,” Kaine said. “At the national level, we need to recommit to having the world’s most talented workforce.”

In his campaign platform, Kaine lists “three keys to American competitiveness”: boosting business growth, building a skilled workforce and balancing the federal budget. Kaine seems particularly energized when discussing his workforce development agenda, which includes improving standards for science, technology, engineering and math curriculums and promoting career and technical education.

His message dovetails nicely with the White House’s emphasis on “STEM fields” and Obama’s message to “win the future” through innovation and spending on education. The president this month announced a new four-year effort to spend $100 million in existing resources to create a Master Teacher Corps, designed to create 10,000 science, technology, engineering and math teachers.

Even before the president’s announcement, a big boost in spending to develop more such teachers and to promote the subjects they reach was a central feature of the House Democrats’ campaign-season manifesto for creating more jobs. Dubbed the “Make It in America” plan and orchestrated by Minority Whip Steny Hoyer of Maryland, the package is an amalgam of more than two dozen proposals intended to strengthen U.S. competitiveness, with a special focus on boosting manufacturing. One bill would establish a national strategy to attract manufacturing businesses to the United States and help manufacturers compete overseas.

Another proposal would eliminate a tax deduction for companies that move jobs overseas and would provide a new tax credit for companies that return jobs to the United States. Senate Democrats pushed identical legislation to a test vote this month. Though they knew the GOP had the votes to block it, the majority leadership hoped the debate would underscore their criticism of the outsourcing by Bain Capital, the investment firm Mitt Romney started, and provide a political boost to the sponsors, Sens. Debbie Stabenow of Michigan and Sherrod Brown of Ohio, both of whom are in serious fights for re-election. They also hoped to force Republicans into a politically tough decision; in the end, both GOP Senators in tossup races, Dean Heller of Nevada and Scott Brown of Massachusetts, broke ranks and voted with the Democrats.

“Make It in America” also calls for creation of a national infrastructure bank, which is included in Obama’s jobs proposal. The GOP-controlled House has not taken up the bill, leading Democrats to accuse Republicans of obstructionism. House Democrats set up a “GOP No Jobs Clock” website, which counts the time from the start of the 112th Congress in January 2011 until a jobs bill — as defined by Democrats — is brought to the floor. It’s still ticking, and likely still will be on Election Day.

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