There are a few bright spots on the economic front. In Florida, home sales are up even if prices are down. Ford actually made a profit last year. And the federal government reports the economy grew at an annual rate of 5.7 percent in the last quarter of 2009. But there will not be a true economic recovery until President Barack Obama and Congress agree on ways to create more jobs.
The president's proposed 2011 budget released Monday appropriately focuses on job incentives. He proposes a $5,000 tax credit for each new employee businesses hire up to $500,000 per firm. The Congressional Budget Office says that this type of tax cut is the best way to accelerate job growth. And it may be. But the concern is that too often businesses try to qualify for the money by rearranging their current work force. The administration says it is putting rules in place to prevent any gaming of the system — so that businesses can't first lay off workers and then hire new ones and claim the tax credit. This will have to be aggressively policed.
Another way to create jobs is to invest in public works infrastructure projects and research and development, and Obama's budget makes more than $100 billion available for those initiatives. This is a wise investment in short-term jobs and long-term national resources. Florida, for example, will reap significant private sector economic growth from the just-announced federally funded high-speed rail project between Orlando and Tampa, in addition to thousands of jobs.
The president also called in last week's State of the Union address for increasing exports to countries such as Panama and Colombia — which would be particularly beneficial to Florida. But the administration is going to have to go further and prod Congress to quit stalling and approve trade agreements with those countries that would help create more jobs in this country.
In Congress, the House already has passed a new stimulus bill that includes essential provisions such as extending unemployment benefits and sending more federal money to the states. Those are critical for Florida, where the unemployment rate is 11.8 percent and Gov. Charlie Crist is counting on additional help to pay for Medicaid and education expenses. Without that help, the state Legislature will have to make deep spending cuts that will make the job market even worse.
Once again, the U.S. Senate is dragging its feet amid complaints about the federal deficit. Senate Majority Leader Harry Reid is expected to announce details of a Senate bill this week, and it should include the key components of the House bill. The projected federal deficit, which in Obama's proposed budget would be more than $5 trillion over the next five years, is a serious concern. The president's latest projection is more than one-third larger than the administration estimated just a year ago. But a lot has changed since then, and it is going to take more federal spending to create jobs in the short term to create a stronger economy in the long term.
Finally, there is some evidence that the economy may be starting to turn the corner. But until there are more jobs, that will be little satisfaction for Americans struggling to find work and hold on to their homes.