Congress Faces Gridlock in Tackling Unemployment

With Republicans taking back control of the House and Democrats retaining control of the Senate, two philosophies on tackling unemployment will go head to head. Republican lawmakers suggest cutting spending arguing that economic stimulus does not work. On the other hand, Obama stands firm on his belief that increasing the amount of spending and money in the system is the answer. Either the two parties will have to work together or they won't get anything done. Obama is utilizing the Clinton “triangulation” strategy to appeal to both sides or have bipartisan support. Ideas include, a proposed pay roll tax day and making the research and development tax credit permanent. One major difference between Clinton’s triangulation strategy and Obama’s is the state of the economy. In the 1990s, the Democrats and the Republicans had the luxury of an improving economy. The same cannot be said this time around and is a major concern in combating slow growth and high unemployment. Many economists believe the key is more spending, but Greg Mankiw, a top economic advisor to George W. Bush, thinks differently. Mankiw says there are two problems that need to be addressed in terms of the economy, the short term and the long term. Incentivizing businesses to invest is an ideal short- term solution, but the long-term solution is not so easily defined. Making choices will not be easy, as one side or the other will dislike any decision. For example, raising taxes would upset the Republicans, while cutting spending from government transfer programs like Social Security would be unpopular with the Democrats. Either way, Obama has a tough job ahead of him.