Policy Dean Says Unemployment Biggest U.S. Challenge in 2011
January 26, 2011 – For the first time in his presidency, Barack Obama must contend with a Republican-controlled chamber of Congress. Partisanship could keep Obama from achieving all of his policy goals, says Edward Montgomery, dean of the Georgetown Public Policy Institute. While the lagging economy and high unemployment remain the president’s most pressing policy challenges, Montgomery notes that there are other serious issues – trade, energy and international security among them. Montgomery spoke with the Blue & Gray the day before the State of the Union about “the jobs question,” using trade to ease unemployment and the new political climate in Washington.
Why do you think Obama’s No. 1 policy issue is jobs?
The unemployment rate is near double digits and we’re creating jobs, but only at a rate that will bring unemployment down over a very long period of time. One of the highest priorities, if not the highest, has to be getting the economy accelerated and accelerating the job creation atmosphere.
This isn’t a solo issue, however. Concurrently, there are issues of strategies for tax reform, regulatory reform and spending on different types of projects that are all focused around creating jobs. You can’t address unemployment without looking at these, as well as the trade agenda.
How is the administration’s trade agenda tied to employment policy issues?
The president traditionally has said that creating jobs requires stimulating growth in export promotion. You saw this with the recent China visit, where talk was of opening their markets to sell goods to them, which creates jobs here. The question is: what will be the president’s trade agenda? Will he get the Korean trade package through and how will he resuscitate a trade agenda with regard to Chile, Latin America and other areas where pacts have been negotiated, but have languished?
But the public remains leery about their job prospects and suspicious about whether trade treaties do create jobs. The issue is balancing the domestic reality of the incredible nervousness and concern about jobs and the benefits and challenges associated with a more forward-leaning trade agenda.
Other than jobs, what other policy issues could come to the forefront this year?
The Republicans will force a conversation, at least, around long-term fiscal stability. The conversation will include items such as entitlement spending on Medicare and Medicaid and Social Security. What are we doing today in terms of the budget deficit and fiscal responsibility? And, more importantly, how are we going to put ourselves back on the path to longer-term fiscal stability? Republicans want this conversation, and I think the president will talk about the issues and key these things up.
It seems as though policy issues, such as energy, have fallen off the radar. Do you believe that will reemerge this year?
I wouldn’t be surprised if oil prices continue to rise throughout the year, which will prompt more conversations about what we’re doing with the supply of energy and the cost of energy.
Anything you do on the energy front has a corollary about what’s happening on the environmental front. Energy use is highly connected to climate change and to a variety of environmental issues. I’d call this the dovetail of energy/environmental policy. These issues haven’t gone away, and they’ll come back.
What about international policy issues? With the focus on the economy, it also seems like we’re hearing less about security, terrorism and the war in Afghanistan.
I don’t think they’ve fallen out, I think they’ve moved down the policy list. In 2004, the wars and security were the top things on people’s plate. In 2008 and 2010, the economy and the state of the federal government were on top. But Afghanistan and Iraq and all of the questions about strategies and troop levels are still very important. The president will undoubtedly speak about both of them in the State of the Union. But because the economy has been in such difficulty, it’s moved to the top of the list.
How does the president balance domestic and international policy challenges in such an inward-focused environment?
There are many people who think that the trade agenda got put on the backburner because of the state of the economy, and that it wasn’t politically feasible to bring up issues of expanding trade and free trade treaties in the context of rising unemployment and a deep recession.
We’re certainly not at the fiscal levels we want or need to be at, so whether the trade agenda will be back on the agenda in a more prominent way is an open question. The administration [is saying] the trade agenda is part of the job creation agenda.
How will the Republican-controlled House factor into Obama’s policy approaches?
The new Congress, particularly the new House, will change how and what you can get done, especially in the energy/environmental policy area or health care. The administration has goals and objectives, but what it can get done and what it may have to compromise on are different than last year. Both parties will have to figure out where to compromise and what they can live with.
Objectively, Obama has had pretty remarkable success getting his agenda through in the first two years. The challenge is that he did pretty well when he controlled the House and Senate. The question is how well will he do when he doesn’t have that luxury – which is not unusual. Most presidents don’t control the House and Senate by a big majority for their whole term.
That will be the ultimate test for him – is he able to protect his accomplishments to date and keep making positive steps in the next two years?