WASHINGTON (Reuters) - Poor U.S. jobs figures on Friday put President Barack Obama on the spot to create a viable jobs plan in a speech to Congress next week that may help determine whether he wins re-election or not.
With no jobs created in August, Obama is under pressure to lay out a bold, long-term strategy to invest in measures that would jump-start economic growth. A successful approach would give him a 2012 campaign platform against Republicans, who accuse him of being a job killer.
But political appetite for expensive government spending measures is limited, and analysts say he may go with a mix of bold and less risky measures, with some that have decent chances of congressional approval and others that do not.
“I think he’s going to probably try to thread the needle — have a few things that are very practical and necessary for the economy over the next 12-18 months,” said Mark Zandi, the chief economist at Moody’s Analytics and a former adviser to 2008 Republican presidential candidate John McCain.
“Anything he says, it’s going to be hard for him to get a lot of people really excited about.”
Obama is likely to propose a mix of tax breaks, help for homeowners and some spending on public works.
Zandi said an infrastructure bank and corporate tax reform could also feature in the speech.
Friday’s Labor Department report showed the first time in nearly a year that the economy had failed to create jobs. The data raised the stakes even higher for Obama, whose proposals — and the reception they get — could define his campaign to retain the White House in 2012.
“It will cause more attention and focus on the president’s forthcoming proposals, but the report also highlights the difficulty in crafting any short-run policy to move the unemployment rate down,” said Alex Brill, a former economic adviser to Republican President George W. Bush.
Gene Sperling, Obama’s top economic adviser, said Friday’s figures did not change the president’s general view about the economy or what he intends to propose.
“He will be very specific about what we can do that can have a meaningful impact on job growth and the economy right away,” Sperling told Reuters Insider television, noting that “self-inflicted wounds” from the divisive debate over raising the U.S. debt ceiling had contributed to the tough conditions.
“The economic case is quite compelling that we need to do something that can have a definitive and meaningful impact on projected economic growth over the next 12 to 18 months and on ... job growth. And the president felt very strongly about that even before the job growth number today.”
Despite his strong feelings, and even with the jobs report as an impetus, Obama’s biggest challenge will be getting the Republican-controlled House of Representatives to support any of the measures he proposes.
The deficit debate and even a squabble this week over what date the president would address Congress have highlighted the partisan tensions that have made it nearly impossible for the White House to realize its policy priorities.
“The reality of the situation is, there’s not much they can do in the very short term because anything significant is going to require congressional approval,” said Steven Ricchiuto, chief economist at Mizuho Securities USA.
“In order to do something very constructive, they have to change the debate in Washington, and I don’t know whether this president has the clout to change that debate.”
Obama put a stop on Friday to new rules that would have limited smog pollution, unexpectedly reversing course on a key policy measure after businesses argued it would kill jobs and cost them billions of dollars.
Whether he can change the debate or not, Obama is not the only U.S. leader under pressure.
Lawmakers in Congress also face public ire as they face re-election next year.
“It puts more pressure on Congress to do something,” said Heather Boushey from the Center for American Progress, referring to the Labor Department figures.
“Since the beginning of 2011 Congress has pretty much expressed a complete unwillingness to do anything on jobs.”
Republican and Democratic lawmakers would disagree with that contention, but both sides know that their records will be judged by voters in 2012. If Republicans refuse to support any of the “bipartisan” proposals the White House says Obama will put forward, the president will no doubt remind voters of that throughout his re-election campaign.
Editing by Mohammad Zargham