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The Politics Behind Obama’s New Jobs Plan

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"The Politics Behind Obama’s New Jobs Plan"

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In the President’s last weekly address (August 3), he offered the following deal to Republicans, which he termed a “grand bargain for the middle class:” simplify the tax code in exchange for new job spending. While there are substantive reasons for this move away from the president’s previous focus on a deficit “Grand Bargain” — falling deficits and slow growth — there’s also a political rationale: the Democrats need a new argument on jobs for the 2014 midterm.

A recent Pew poll outlines the basic problem. The Democrats face a tough mid-term election in 2014 and that poll shows Obama hemorrhaging support among white working class voters — his approval rating among this group is down to a truly abysmal 26 percent. This is the same group that powered historic Republican gains in 2010, so signs of big slippage among these voters have to worry Democrats at this point.

What do white working class voters want? Above all, they are looking for material improvements in their lives, improvements that are not possible without strong economic growth and the jobs, tight labor markets and rising incomes such growth would bring. In a low growth environment, these voters will remain exceptionally pessimistic and inclined to blame Democrats and government for their lack of upward mobility. Conversely, with higher growth, these voters will be far more sympathetic to what Democratic candidates have to offer.

As a bonus, improved economic performance would probably go a long way toward helping motivate core groups in the Obama coalition — minorities, youth, single women — to show up at the polls. So Obama’s new grand bargain is both the right thing to do in policy terms and excellent politics to boot. Even if Republicans do not cooperate in the short run, as seems probable, there is much to be gained by fighting for what a key constituency really wants and forcing your opponents to put themselves on the opposite side.

In the long run, the goal of reaching a high growth economy is central to the current Democratic political project of consolidating and expanding the Obama coalition. A very simple equation captures what’s at stake here:

Demographics + Growth = Dominance

Democrats have the demographics part of the formula already. The growth part, on the other hand, remains lacking, suggesting that Democrats would be wise to continue pursuing something like Obama’s jobs proposal for as long as it takes to be successful.

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