White House Previews Jobs Agenda, Direct State Aid Not Mentioned

Leaders of the nation’s largest state and local associations were summoned to the White House this morning to hear a preview of the President’s forthcoming jobs address from Danielle Gray, Deputy Director of the National Economic Council, and Cecilia Muñoz, White House Director of Intergovernmental Affairs.  While the administration is trying to keep a close hold on details in advance of the speech, it is clear that the President will propose both a continuation of existing programs and new initiatives across three major policy areas: taxes, infrastructure, and unemployment assistance.

Although, Bloomberg and some other media outlets have raised the prospect of direct aid to state and local government being included in the new jobs agenda, the President's advisors indicated that this would not be part of the speech with officials questioning where the rumors of flexible funding for the states were coming from.  However, the officials did indicate that the President is eager to assist state and local governments by working with Congress to achieve long-term certainty in transportation and education funding, by reauthorizing the multiyear bills now pending, and by supporting greater flexibility in using existing federal funding sources.

While much speculation has focused on infrastructure as the major focus of the President’s remarks, his advisors made it clear that there would be new proposals of similar scale and scope across all three focus areas.  This would indicate that the speech will likely feature tax incentives beyond the extension of expiring payroll tax and business investment measures that have been discussed to date.  It also lends weight to rumors that the President may call for new programs to fund apprenticeships or other training initiatives for the long-term unemployed in addition to extending unemployment insurance.  Within the transportation category, the White House said a new national infrastructure bank would be part of their plan, but did not indicate a dollar figure the President has in mind for infrastructure spending.  The President’s advisors also stated that the plan would be paid for in full, without outlining the total cost of the plan or offering specifics on entitlement reforms or other measures that could cover the cost of short term spending.  

The true purpose of the speech is to set the stage for the 2012 campaign and distinguish the President’s agenda from his GOP rivals.  With Congress fully consumed in the deficit reduction deliberations of the Super Committee, any proposals for new spending will be dead on arrival.  Given this context, the President’s messages on state flexibility for existing funding streams will likely have a much bigger impact on the immediate fortunes of cash strapped states than anything else included in the speech.