As attention shifts from health care, a new focus for Washington: Jobs

By Lisa Mascaro

Monday, Jan. 25, 2010 | 2 a.m.

The first time then-President-elect Barack Obama assembled his economic team on a December day in Chicago in 2008, the prognosis was dire.

Christina Romer, a scholar of the Great Depression, foretold of a deepening recession that could match the 1930s. Larry Summers warned of untold job losses. Timothy Geithner reported on financial markets on the verge of collapse. Peter Orszag, for the pick-me-up, showed the mounting debt.

The president embarked on an ambitious series of proposals that most economists believe saved the country from an even worse downturn in 2009.

But it was not enough to sway public opinion as the unemployment rate rose and Democrats’ popularity fell. A year later, Massachusetts voters changed the political landscape and prompted Democrats, including those in Nevada, to pivot from health care to a new agenda — jobs, jobs, jobs.

In a state among the worst hit by the recession, how could Nevada’s elected officials in Washington have so misread voter mood?

“Judging by where the Democrats stand today, it’s clear that they have made a colossal miscalculation,” wrote veteran political analyst Charlie Cook in Washington. “Obama and his party have no doubt taken on big and important fights. But given the nation’s tremendous economic troubles, they don’t seem to have picked the most urgent ones.”

Even Nevada’s passionate supporters of health care reform can’t turn the page fast enough on the legislation that has consumed Washington’s attention for much of the past year.

“I don’t think anybody fully understood how deep and wide this recession was and how hard it was going to be to pull us out of it,” Democratic Rep. Shelley Berkley said.

“You lost your job, you’re losing your home — you’re not going to care if your neighbor doesn’t have health care,” Berkley said. “We just got ahead of ourselves a little bit.”

Nevada’s unemployment rate inched back up to 13 percent, the state reported last week, prompting another round of criticism from Republicans that the party in charge in Washington is out of touch.

“Government takeovers do not work. The bailouts have not worked. Taking more of our private-sector dollars during a recession to grow government does not work,” said Sue Lowden, the former state party leader who is hoping to unseat Senate Majority Leader Harry Reid.

She called on Reid to cut taxes to help Nevada’s economy.

As is so often the case in Washington, the war is not over the substance of what is being done, but the perception — who is winning the battle over the message.

After Scott Brown’s victory in the Massachusetts Senate race, Republicans clearly get the victory lap. His populist message — that the party in power is not attending to the needs of regular folks — resonated.

Obama said it’s the same message that propelled his own 2008 campaign for the White House. With Obama preparing his State of the Union address Wednesday, Democrats will have another chance to make their case.

Many economists believe Democrats made great strides in the past year in shoring up the economy they inherited when President George W. Bush left office:

• The $787 billion economic recovery bill put money in people’s pockets with tax cuts and unemployment aid, saved teaching jobs and is paying for road projects.

• The Obama administration’s

$75 billion housing foreclosure program has begun to help Nevadans modify their mortgages.

• The second Wall Street bailout, despite its unpopularity, shook zombie banks out of their stupor and back into lending.

Opponents in the Republican Party and the increasingly powerful Tea Party movement decry these efforts as wasteful spending that is adding to the nation’s debt — as do Nevada’s Republicans in Washington, Rep. Dean Heller and Sen. John Ensign.

Yet Nobel Prize-winning economist Paul Krugman argues that the problem with Democrats’ response to the Great Recession is that the government fix was not aggressive enough. The recovery package, for example, was watered down as Democrats tried to appeal to their conservative flank and attract Republican support, which never materialized.

Reid’s office said economic concerns have always been at the forefront as Nevada’s economy worsened, and dismissed complaints that too much time was spent on health care.

“We can walk and chew gum at the same time,” Reid spokesman Jon Summers said.

The majority leader, for example, secured the largest increase in federal spending on Medicaid for Nevada in the recovery package — substantially altering a long-standing formula for how Nevada receives federal funding.

Reid also tucked a provision into the recovery act that is now being unleashed to build a north-south energy transmission line — a $550 million project that will bring construction jobs, tax revenue and new renewable energy companies to Nevada. Construction could begin this year.

“That one provision alone not only helps in the short term with construction jobs, it helps in the long term create a more diverse economy for the state,” Summers said. “That was a provision inserted by Reid specifically for Nevada.”

Berkley has pushed for tax breaks for business travelers — allowing them to write off meals or spousal travel, for example — to help attract visitors to Las Vegas.

“I have been talking about Nevada’s problems in Washington for well over a year, long before the election,” Berkley said. “It just hasn’t translated into action.”

But Democrats, as the party in charge, get the blame for an economy that remains in the tank, a problem that haunted the party’s Massachusetts candidate last week.

Another Republican trying to oust Reid, former UNLV basketball star Danny Tarkanian, hoped to capitalize on the Massachusetts victory with a fundraising pledge — seeking $24 donations, one for every year Reid has been in the Senate.

Tarkanian wrote to supporters last week: “Brown’s victory was the latest repudiation of Harry Reid’s billion dollar bailouts, so-called stimulus plan, and reckless scheme to have the federal government take over our nation’s health care system.”

Obama acknowledged his failure to explain to Americans why fixing health care was a cornerstone of broader efforts to improve the economy.

“I think that if we had gotten health care done faster, people would have understood the degree to which … health care is part of a broader context of how am I going to be able to move the middle class forward in a more secure and stable way,” Obama said in an interview with ABC News after the Massachusetts special election results were in.

“I think that what’s happened is, is over the course of this year, there’s been a fixation, an obsession in terms of the focus on the health care process in Congress that distracted from all the other things that we’re trying to do to make sure that this economy is working for ordinary people.”