Is job growth a factor in the White House debt talks?
CORRECTION: This interview misstates the record of Presidents winning re-election during periods of high unemployment. Unemployment was above 8 percent when Franklin D. Roosevelt was re-elected in 1936 and 1940.
STEVE CHIOTAKIS: A couple of jobs reports are just out this morning. And they show an improving employment picture for the country. Payroll firm ADP said private employers added 157,000 workers in June. And the Labor Department is said fewer people filed for first time jobless claims last week. Meanwhile, jobs are likely to come up as the White House and Republicans try to find common ground on raising the federal debt limit.
Marketplace’s Mitchell Hartman is with us live with more on that. Good morning Mitchell.
MITCHELL HARTMAN: Hi Steve
CHIOTAKIS: Tell us about the progress on the debt limit talks.
HARTMAN: Well, last month when Republicans walked away from the talks led by Vice President Biden, they staked out the position that any increase in taxes was off the table. It was spending cuts only in exchange for raising the debt ceiling. The President’s been saying some additional tax revenue has to be part of the mix at least. This morning, Republican House Majority Leader Eric Cantor is saying getting rid of some tax breaks could be part of a deal, as long as it’s offset by tax cuts elsewhere. The White House, meanwhile, seems to be opening the door to some cuts to Medicare and even Social Security.
CHIOTAKIS: How does job growth factor in here, Mitchell?
HARTMAN: Well, Democrats have some spending plans to jumpstart jobgrowth. More lending for construction — that could be a boost for blue-collar workers — and a payroll-tax break for employers to encourage them to hire. It’s called ‘stimulus.’ Republicans say cut regulation to stimulate job growth, don’t spend more.
Paul Dales is at Capital Economics in Toronto.
PAUL DALES: There doesn’t really seem to be much appetite for any more fiscal stimulus, which I think will mean that we’ll see the unemployment rate fall only very gradually over the next few years.
So it’s around 9 percent now, the Fed projects it’ll only be down around 8 percent by the election next year, and that’s higher than any other sitting president has ever been reelected with.
CHIOTAKIS: All right, Marketplace’s Mitchell Hartman. Mitchell thanks.
HARTMAN: You’re welcome.
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