Obama to lay out jobs plan on bus tour

08/15/2011 12:00 AM

08/15/2011 12:08 AM

WASHINGTON — As he sets out on a three-day bus tour of the Midwest focused on the economy, President Obama is coming under growing pressure from fellow Democrats to put forward a more aggressive strategy to create jobs than the one he has been touting for months.

Obama has offered a jobs package crafted to win Republican support in a divided Congress. But Republicans say they won't vote for several pieces of the plan, and Democrats contend it would fall short of what's needed to boost job growth or revive Obama's political prospects.

White House advisers said the president's economic team is working on a new approach to jump-starting the sluggish economy.

"You'll see more ideas," said Jason Furman, deputy director of the president's National Economic Council. "People here are constantly thinking about new ideas and the president is constantly talking about new ideas."

But Furman and other White House aides have declined to reveal a timetable, and many voters are clearly impatient. Polls show Obama receives poor grades for his handling of an economy that may be slipping back into recession.

Obama's jobs agenda, which he plans to tout on his Midwestern tour, calls for $30 billion to rebuild roads, bridges and ports; improvements to the patent system to spur innovation; trade deals with a trio of countries to boost exports; a $40 billion extension of unemployment insurance benefits; and renewal of the current one-year reduction of the payroll tax at a cost of up to $120 billion.

A range of economists and Democratic critics call those ideas inadequate. Asked about Obama's support for free-trade deals with South Korea, Colombia and Panama, Dean Baker, co-director of the Center for Economic and Policy Research, a research and education organization, said, "I would think they would be embarrassed to mention it.

"These are small countries, and we already have a lot of trade with them," he said.

Obama's policies "are just not big enough to make much of a difference," said Robert Reich, who was labor secretary under President Clinton.

Alternative ideas have been floating up from Democratic think tanks, elected officials and strategists: Peter Orszag, Obama's former budget director, advocates tripling the size of the payroll tax break — essentially wiping out the payroll tax entirely — and keeping the rate low as long as unemployment remains high.

Others are pressing Obama to take advantage of low interest rates and borrow money to underwrite a far larger public works program. Such a plan would spur enough long-term economic growth to pay off the extra debt, supporters argue.

Mark Zandi, an economist who has advised the Obama administration, suggests making it easier for homeowners to refinance mortgages at today's extremely low rates. The idea would be to eliminate charges that make it too costly for some people to refinance. He also advises changing immigration policies so that foreign students with advanced degrees find it easier to stay in the U.S.

Still, "There's no magic bullet here," Zandi said.

White House aides counter that large-scale, costly ideas stand little chance of getting through the Republican-controlled House.

But it's no sure bet that Congress will go along with smaller-scale ideas, either. Republican leadership aides said the GOP is supportive of the trade deals and a patent overhaul, although both have stalled several times this year. Obama's call for renewing the payroll tax cut has drawn fire from some Republicans, who argue it would worsen the deficit, and the GOP has also opposed his plan to extend unemployment insurance.

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