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Obama Must Push for Jobs Creation, Not Deficit Reduction

This post first appeared on Washington Monthly.

The New York Times reported last weekend that there's a divide within the White House when it comes to the economy. Political advisors, including David Axelrod and Rahm Emanuel, see the polling data and are inclined to respond to public concerns about government spending and deficits. The economic team, including Christina Romer, Jared Bernstein, and Tim Geithner, see the economic data and are inclined to actually try to create more jobs and generate more growth.

We were reminded again of this divide today. ABC's Jake Tapper spoke to Axelrod about the economy, and the senior White House advisor took the expected line.

In his February budget proposal, the president requested $266 billion for additional stimulus for the economy. And just a month ago, the President called for $50 billion in emergency aid to states alongside the extension of unemployment benefits. This morning Axelrod called again for extension of unemployment benefits, but aid to states was not on his list.

"It's true that there is not a great desire" on Capitol Hill to spend more money, Axelrod said, "even though there is some argument for additional spending in the short-run to continue to generate economic activity."

"There's not a great appetite for it, but I do think we can get additional tax relief for small businesses -- that's what we want to do -- additional lending for small businesses," the President's senior advisor said.

And that was all Axelrod was prepared to endorse -- extended unemployment employments (Axelrod said it's something we "ought" to do, as opposed to "must"), and extended tax cuts for small businesses. Axelrod acknowledged that there's "some argument" for additional short-term stimulus, but it wasn't an argument he was necessarily prepared to endorse.

Here's hoping White House officials take a moment to read Atrios.

So let's say Obama's people have correctly deduced that there's no chance in hell of getting anything through Congress. They have two basic options. First, they could get on the teevee every day and say, "This is my plan to help. Republicans in Congress won't pass it." They could hold rallies in Maine. Allies could run ads. At least people would know who is for and who is against...and just what it was that people are for or against.

Option two is back off proposals you've previously made and have Axelrod get on the teevee and say, "there is some argument for additional spending in the short-run to continue to generate economic activity."

My sense is that President Obama really hates -- and actively avoids -- picking fights he fully expects to lose. Based on his public comments and proposals, I'd say the president really does endorse his economists' approach and wants additional stimulus, but doesn't want to go the mat to fight for spending he's not going to get. The defeat would leave him weaker, exacerbate intra-party tensions, and at the same time signal that the White House lacks confidence in the strength of the economic recovery.

But the current alternative is far worse, especially given the fact that the White House should lack confidence in the strength of the economic recovery. It makes a lot more sense to push an ambitious jobs bill -- like, now -- invite Republicans to do what they always do, give Democrats something to fight for, and have the debate.

Of course, the problem isn't exclusive to the White House. Indeed, the problem didn't originate with the White House at all -- Axelrod said frustrating things on "This Week" earlier in large part because there are more than a few hand-wringing Democrats on the Hill afraid to prioritize the economy over the deficit.

Here's hoping the entire party, after reading Atrios' post, also takes a look at Ezra Klein's latest piece.

[P]olitical scientists have a pretty good handle on what wins elections, so I began asking them the question that some say is bedeviling the White House: Should the White House focus on polls or paychecks?

The answers were unequivocal: "A policymaker reading polls who finds that people are concerned about the deficit and says I should rein in spending and I'll get credit for that, I don't think there's evidence that'll move voters," the University of Denver's Seth Masket says. "You want to get as much money in voters' hands in the months before the election as possible."

John Sides, of George Washington University, helped me run the numbers on presidential elections: We made one graph comparing the share of the vote the incumbent party got with the change in the deficit that it had presided over. It looked as if we'd spilled a bag of dots onto a piece of paper. The next graph plotted vote share against change in real disposable income. The line showing a correlation fit perfectly -- more perfectly, in fact, than I'd anticipated.

Yes, Republicans will block any measure intended to improve the economy, and it's largely too late for a new stimulus effort to boost the economy before November. But it's still worth having the fight -- force the GOP to stand in the way of job creation, and show the public that Democrats are prepared to fight to improve on an unsatisfactory status quo.