Published: January 9, 2009

Jobless, and lots of them, on Obama's side

By Elmer Smith

BARACK OBAMA didn't come with his hat in his hand when he strode to the podium at George Mason University yesterday.

He didn't stutter when he laid out the basic framework of an economic-stimulus plan that will significantly increase a projected $1.2 trillion deficit. It's his game to win or lose and he knows it.

His televised talk was overheard by millions of Americans. But it was directed at the 535 who will pass most of his $775 billion American Recovery and Revinvestment Act next month.

It would have been dead on arrival this time last year. In fact, lawmakers who lavished $700 billion on financial institutions three months ago with almost no oversight would have done a line-by-line hatchet job on this mammoth budget-buster a year ago.

These are the same fiscal watchdogs who asked almost nothing of Wall Street execs but wanted pay cuts from autoworkers who have been taking cuts for years.

Extending unemployment benefits and providing tax refunds for people with incomes so low they don't pay taxes have always been tough sells in Congress. Deficit-financing of billions of dollars in public-works projects would be another nonstarter.

But the package will survive largely intact because the fastest-growing constituency in America today is the newly unemployed.

The bright line between liberal and conservative fiscal policy is not so bright anymore. If the new conservative is a liberal who has been mugged, the new liberal is an out-of-work conservative.

"People who worked 20 years before their benefits ran out don't want to hear excuses," said John Dodd of the Philadelphia Unemployment Project. "They've done everything right and yet the economy is collapsing around them."

In Pennsylvania alone, tens of thousands have been added to the unemployment rolls this year. The state increased the number of people answering its benefit hot lines from 600 to 800 since summer but still has had to hire temps to man the phones.

Pennsylvania Careerlink's hot lines are now operating 13 hours on weekdays and all day Sunday.

The Philadelphia Unemployment Project is planning workshops on how to survive the recession, offering advice on avoiding foreclosures and teaching a class of people how to access government services.

"We see more and more middle-class people, including some who aren't middle class any more," Dodd said. Some have never had to rely on public supports before.

"Now they're starting to understand. They are some of our strongest advocates for government programs."

The American distrust of big government has not been turned on its head. Even government-intervention advocates like Dodd are concerned that too much will go into infrastructure.

"I'm concerned that we'll spend money building bridges and roads without creating very many jobs," Dodd said. "Public- works projects are costly.

"I think you'll get a lot more people employed in community-based projects than you will if you build a highway.

"But he's trying to combine things like fighting global warming and fixing the infrastructure with the need to create more jobs. I understand that."

Congress members will understand, too. But they will fine-tune Obama's framework and do it their way.

Republicans may not go for his proposal to extend unemployment benefits to part-time workers. Providing subsidies for employers who continue health-insurance coverage to laid-off workers will cost the Democrats a lot of political capital.

Even in the current political climate, the idea of providing a $3,000 tax credit to employers for every new job they create or old job they save is likely to hit the cutting-room floor with a thud.

To me, it sounds like an invitation for employers to lay off people and then rehire them for the tax break. Or we could end up paying for jobs that would have been created without government aid.

Don't expect Congress to just roll over. This massive expansion of government programs will be mostly a temporary intervention written with deadlines and sunset provisions.

"It is time to set a new course for this economy," Obama concluded yesterday.

This may be just a moment in time. But Barack Obama looks like the right man for the moment.