By Colby Itkowitz and Scott Kraus, The Morning Call
U.S. Sen. Pat Toomey asked a roomful of 20 or so local businesspeople in Pottsville on Tuesday to raise a hand if they felt government regulations had worsened for their businesses in recent years.
Every hand went up. During a roundtable discussion, he listened to one after another vent about an environmental rule or a labor law that had been costly or burdensome. "I hear these stories, and is it any wonder we don't have a strong recovery? It's unbelievable," said Toomey, R-Pa.
Meanwhile, outside his Lehigh Valley office, a group of pro-union protesters offered an opposing view, complaining Toomey hasn't done enough to promote job creation. Toomey's ideas "help big business, CEOs and millionaires" and not the working class, said 62-year-old Jody Weinrich, a garment textile worker laid off in 2008 by TAMA Manufacturing.
With the unemployment rate hovering above 9 percent month after month, politicians from the White House on down have pledged to refocus on putting Americans back to work.
The 2009 economic stimulus package was designed to pump taxpayer dollars into the economy to spur growth. To some it was a massive failure because unemployment continued to rise, and to others a success because it warded off an even worse recession.
Since then there's been little consensus in Washington on how, or even if, the federal government could create jobs.
In Toomey's view, the nation's stagnant unemployment is a product of government heavy-handedness in the private sector. If the government simply moved aside, most Republicans say, businesses would feel unfettered to expand their workforce.
That economic philosophy is in contrast to the Obama administration and Democrats, who believe the government can promote hiring through targeted spending and tax benefits directed at the middle class and small business.
Ask U.S. Rep. Charlie Dent, a Lehigh Valley Republican, how to do it, and he says roll back policies that scare businesses, like the health care law or offshore drilling restrictions. Ask U.S. Sen. Bob Casey, a Pennsylvania Democrat, and he lists a smorgasbord of government-funded incentives to encourage people to consume and employers to hire.
And economists too have trouble agreeing on the proper approach.
There are those who say businesses need certainty to invest in new employees, so government should scale back regulations and send a message that it won't be adding to the cost of doing business.
Lehigh University economist Frank Gunter echoed the Republican line that big government is scaring businesses away from hiring.
"Companies that aren't sure what to expect don't take chances on hiring new workers, he said. "When you are increasingly uncertain of what is going to be happening six, nine months from now…as a business, I am going to pile up cash," Gunter said. "[Delaying implementation of health care reform] would give us two years to prepare."
Others say the government needs to increase spending and offer targeted tax breaks to give consumers more money to spend. Companies only hire when there is demand for their products and services, those economists say.
A targeted cut in the payroll tax aimed at rewarding employers for every new hire would help, said economist Gary Burtless of the left-leaning Brookings Institution. That's advocated by the White House and Casey.
But such measures won't close the 11 million-job gap between the number of people who want jobs and the number of jobs that are available. That would take a substantial increase in federal spending aimed at stimulating demand, Burtless said.
If there's one thing economists on both sides of the debate agree on, it's that to really jump-start job growth — whether through tax reform, new spending or regulatory changes — government would need to take major steps that require the approval of Congress and the president. That calls for consensus, which is sorely lacking.
Given that, Brookings economist Isabel Sawhill said she'd settle for some new infrastructure spending and the extension of the current "payroll tax holiday," a one-year reduction in the amount workers contribute to Social Security designed to temporarily boost income. It's set to expire at the end of the year.
"I think government could do quite a lot if it had the political will or the ability to do so," Sawhill said, "but it doesn't seem to have much political capacity to do anything."