Boehner vs. Obama: Are US job creators really 'on strike'?

Near the top of his speech on the economy, House Speaker John Boehner summed up his view of the problem with this provocative line: “Job creators in America are essentially on strike."

He wasn't arguing that employers are engaged in some kind of willful effort to slow down the economy.

Rather, this was Mr. Boehner's way of saying, a week after President Obama gave his own "jobs plan" speech, that the president's policies have been killing business confidence and standing in the way of job creation.

Is the Republican House speaker right?

Well, "strike" may not be quite the right word. When businesses have to fill a position, they are still hiring. And it's not like employers were setting any records for job creation before Mr. Obama took office.

That said, Boehner isn't making up the issue of frayed corporate confidence out of thin air.

"My sense is that businesses just don't trust Washington after the past couple of years," economist Ed Yardeni told the Monitor last week, citing Obama's health-care reforms. "I've got a small business, and I can tell you for sure that my health-care costs haven't gone down, and they haven't stabilized."

Economists caution against thinking that a sudden personality adjustment in the White House – making Obama more like Boehner – would provide a rapid and complete fix to the high unemployment rate. The economy faces a range of problems that, at best, will probably be solved over the course of several years, they say. In fact, a cover story in the Monitor's print edition recently detailed a number of factors that may be interfering with job creation.

Yet prominent business groups, when outlining their own idea of job-friendly policies, fault the Obama administration on some of the same fronts that Boehner did. And some changes in White House ways, they say, could improve the job market meaningfully.

The US Chamber of Commerce, which counts some 3 million businesses under its wing, praised some of Obama's ideas, such as urging Congress to approve free-trade agreements and transportation investments. But it gave no blanket endorsement.

“A workable jobs plan must genuinely reduce regulatory uncertainty, unshackle promising American industries, and not be overly reliant on government spending and subsidies," chamber president Thomas Donohue said in a statement released shortly after Obama spoke.

Boehner's speech didn't include the words, "here's my jobs plan." But the Ohio congressman, citing his own experience in business before entering politics, did call for concrete steps to counter what he called Obama's "triple threat" to businesses:

• Reining in regulation. Boehner said that a certain amount of regulation is reasonable and necessary, but that rules in many cases are "excessive." He pledged that the Republican-controlled House will pass measures designed to remove unneeded impediments to job growth. He also vowed to pass a REINS Act, which would require congressional review for any new regulation that has a major impact on the economy.

• Reforming the tax code. Boehner called for changes to make the tax system simpler for firms and individuals and to encourage investment while removing special-interest perks. “It strikes me as odd that at a time when it’s clear that the tax code needs to be fundamentally reformed, the first instinct out of Washington is to come up with a host of new tax credits that make the tax code more complex," Boehner said.

• Fixing federal deficits. Runaway spending is another factor hobbling business confidence in the future, he said, adding that a joint congressional committee should focus on restraining deficits through spending cuts, not tax hikes. "That has everything to do with jobs," he said.

US employers aren't uniformly in Boehner's corner. Business owners, like the general public, are divided over the Republican notion of seeking to fix federal deficits without any higher tax revenues, for example.

But the US Chamber of Commerce, in its own jobs plan, highlights some Boehner themes, such as providing "regulatory certainty and relief" and taking action to spur domestic energy production.

The group argues that "millions of new jobs" can be added through such steps, without adding to federal deficits.

On Friday, William Dunkelberg of the National Federation of Independent Business took a direct jab at Obama's recent proposal for temporary payroll-tax cuts and other measures that would drive up the federal deficit next year.

"The more the government tries to do with big spending and borrowing programs ... the more fearful of the future many consumers and business owners will become," Mr. Dunkelberg, the business group's chief economist, warned.

He noted that a sharp drop in consumer confidence this summer coincided with Washington's faltering efforts at fiscal reform, during negotiations over raising the debt ceiling.

But even if business leaders are right that Obama's leadership is, to some degree, impairing job creation, that doesn't mean all would be rosy under a different administration.

Consumer spending is burdened by factors such as high household debt, for example. This weighs on the outlook for businesses that might have the means to invest or hire.

"Even if you're very nice to [employers] and lay out a red carpet,... fundamentally they'll only build widgets if somebody wants to buy widgets," Fareed Zakaria, a policy expert and author of "The Post-American World," said in an interview with the Monitor earlier this week. "Consumer demand simply is weak."

And although the right kind of deficit fix might provide a psychological boost to the nation, it's not clear that less borrowing by government would quickly unleash funds that fuel private-sector job creation, many economists say.

A recent analysis by Goldman Sachs, for example, says that fiscal reforms are needed, but that deficit reduction could hurt economic growth if pursued too rapidly.

Still, Obama and Boehner have some potential common ground. The House speaker gave a nod to infrastructure spending, a part of the Obama jobs plan. The president has issued his own call for making America's corporate tax system more competitive with those of other nations.

And Obama, while resisting a full pivot toward Republican views on regulation, is taking some steps to reduce unneeded regulations.