State of the Union 101: Nine Obama proposals that might create jobs. Boston - The goal of job growth and rising prosperity for the middle class formed the thematic core of President Obama's State of the Union speech Tuesday.
The economy very much needs that.
Not every idea Mr. Obama proposed on this front is a sure jobs gainer. In fact some, like raising the minimum wage, spark strong controversy among economists who champion the goals of employment and growth.
State of the Union
But some economists say Obama offered a collection of proposals that could have a positive effect on jobs and incomes. And they say the focus is warranted, even though signals from private-sector businesses and consumers have been improving.The official unemployment rate has fallen to 7.9 percent, but many forecasters worry it will linger at a higher-than-normal level even if the US economy keeps growing.
Household incomes have barely budged since 1988, according to inflation-adjusted Census data for the median American family.
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Here are nine ideas Obama offered that center squarely on job creation.
- Refinancing more home loans: Obama said many borrowers have never missed a payment, and want to refinance at today’s low rates, but are unable to get approval. Through legislation, the idea is to expand “refi” opportunities that will leave more cash in consumer pockets each month, buoying the economy. Many economists like the idea, but it’s not clear if it can pass a divided Congress.
- Expanding global trade: Obama said he’ll launch talks on a trade agreement with the European Union, and take other steps aimed at boosting American exports. The Business Roundtable, a group of CEOs, praised the move toward an EU trade deal Wednesday.
- Boosting home-grown energy: Obama repeated his call for an “all-of-the-above” approach to expanding domestic energy production and reducing reliance on foreign oil. Economists say this effort has already been a successful job creator, although some say Obama’s focus is too tilted toward renewable and not enough toward oil and natural gas.
- Energy experts say Obama set a realistic goal of doubling renewable electricity generation by 2020. (The president calls for a permanent tax credit to promote sources such as wind and solar.) The White House plan also calls for using some federal oil revenue to finance “shifting our cars and trucks off oil.”
- Another infrastructure push: With the Recovery Act stimulus spent, Obama called for $50 billion more in spending on things like roads and bridges – saying it will make the US a more attractive place for businesses while also creating construction jobs. Some economists say this “frontloading” of infrastructure work, at a time of jobs dearth, makes sense. But the idea also has critics who say it’s unnecessary and unlikely to do much for job growth.