August Jobs Report: Pressure on Obama Mounts

Amid a dismal August jobs report Friday that showed a net zero jobs were created in the U.S. last month, fueling concerns that the nation is heading for another recession, pressure mounts on President Barack Obama ahead of his major jobs speech before Congress on Sept. 8.

Obama is likely to try to establish the political stakes for solving America's unemployment problem, and he's likely to politically live or die by the results. But he's got little option, since economists had been expecting to show a net of 75,000 jobs created in August.

Even that predicted increase was a low number, considering the U.S. is two years out of a recession. But the poor August report, the first time since World War II that the economy had a net zero jobs created for a month, ramps up the stakes even higher than originally anticipated.

Obama's forthcoming jobs strategy, expected to come with a controversial price tag, will determine whether Obama and Democrats or Boehner and Republicans can emerge from gridlock in a presidential election year with the stronger hand. Or, the move will potentially thrust Washington back into a grisly debt-ceiling-talks-like atmosphere,without a looming deadline to force an eventual result.

But with America's unemployment problem continuing -- above nine percent some two years after the official end to the Great Recession -- and with his popularity ratings slipping during the launch of a re-election campaign, Obama apparently understands he doesn't have any choice.

So he's pushing ahead with plans to make a major speech before Congress in a nationally televised event on Sept. 8. But even the date for Obama's high-profile speech couldn't get established without political interruption; originally, Obama had outlined to Congressional leaders in a letter he would make the speech before Congress in a State of the Union-style atmosphere on Sept. 7.

That's one day after Congress returns from recess, and one day before much of America will tune into NBC for the opening game of the NFL season between the Green Bay Packers and the New Orleans Saints. But the Republican party has a presidential candidate debate set for that night, so Republican Speaker of the House John Boehner asked the White House to change to Sept. 7 date.

The White House, citing a coincidence of conflict, obliged -- though it's unprecedented that a date the president wanted to address a joint session of the Congress was effectively rejected.

Still, political niceness was exchanged after the cooperation, with Boehner's camp thanking the President. We appreciate the president working with us tonight and look forward to hearing his new proposals, Brendan Buck, a Boehner spokesman, told Reuters.

But the niceness will likely end there. Once Obama outlines to Congress and the nation plans to get America's unemployed back to work, tensions are sure to rise and either a clear winner, or loser, will likely emerge. We can only hope it's just not the American people who come out on the short end of Obama's gauntlet throwing jobs attack he has planned -- with more grisly gridlock to follow.

That's certainly a likelihood, however, as we saw in the debt ceiling talks. Contention in Washington has been running high on what to do about the budget deficit and America's slow growth economy. Most observers think Obama's jobs plan, said to contain all-new initiatives, will cost American taxpayers.

Obama has said he will lay out a series of steps that Congress could act upon quickly to strengthen small businesses and put more money in the paychecks of the middle-class and working Americans, while also reducing the deficit.

A White House spokesman said Obama's speech before Congress will focus primarily on jobs, however, with detailed proposals on budget deficit reduction following at a later time. Reports suggest proposals from Obama are likely to include infrastructure spending, measures to help homeowners, and tax breaks to encourage hiring new workers.

Already, the U.S. Chamber of Commerce is objecting to one measure, perhaps a signal of where some Republican leaders will dig in and attack later. The business lobbying group said it was skeptical about one potential Obama solution -- a payroll tax holiday to subsidize companies that hire workers.

Companies don't invest and hire people just because they have more cash, Martin Regalia, the group's chief economist, told Reuters. They hire people when they can put those people to work producing a product or a service that they can sell at a profit. That's what they do. And right now the economy isn't presenting that opportunity.

The biggest battle will come over spending, however, with America's deficit after the debt ceiling limit increase now above $14.5 trillion. Republicans have steadfastly rejected Obama's economic proposals over the summer, and his attempt to throw down the gauntlet, if you will, before the nation and Congress with initiatives that most certainly comes with a price tag is a risky move.

Either a nasty debate with no solution will emerge, or either Republicans or the White House will finally emerge with the stronger hand in a presidential election year. Understanding the damage the contentious debt ceiling negotiations did to the country, lowering consumer confidence numbers and a U.S. debt rating downgrade from S&P, White House spokesman Jay Carney said the White House learned a few lessons from the harmful political posturing and gamemanship that happened then -- and it doesn't want a repeat.

Carney said the White House wants to aviod that type of result: We can't have that. We can't afford that.

But Obama's Sept. 8 speech is almost certain to spark another major, contentious Washington debate -- with a defining moment result sure to follow. Stay tuned.