Today, two government leaders addressed the public on essentially the same topic – plans to deal with the struggling economy. At noon, Illinois Governor Pat Quinn held a press conference to announce what he referred to as “Phase Two” of addressing a budget issue created by a hemorrhaging state fiscal situation. This evening, President Barack Obama announced a plan before a joint session of Congress to once again try to stimulate the poorly performing U.S. economy. The fates of both plans devised by the executive branches of both governments will ultimately be determined by the respective legislative branches of government they work with.
Governor Quinn announced that he is preparing to shut down three mental health facilities, two development disability centers and two correctional facilities to save the state $313 million. Quinn stated that the Illinois General Assembly left him with little choice because it did not appropriate enough funds for the state to operate for a full-fiscal year.
President Obama unveiled what he is calling the “American Jobs Act” to spur job creation. The $450 billion package includes an extension of benefits for the long-term unemployed, payroll tax cuts for workers and small business owners, tax credits to hire veterans and the long-term unemployed, jobs for youth next summer and funding to improve the nation’s infrastructure, school facilities and hire teachers.
Quinn’s announcement would result in laying-off 1,900 workers near the start of 2012. He stated, however, that it could be averted if the General Assembly reallocates funds in the fall “veto session” which starts next month. Quinn vetoed $376 million in appropriations from the budget for the fiscal year that started on July 1st to provide the legislature with a vehicle to halt the facility closures and lay-offs. In previous years, the General Assembly had given Quinn the authority (or burden) of adjusting appropriated funds to address low/high priority areas. This year, Quinn stated that “radical” burdens had been placed on areas such as human services, the Illinois Commerce Commission and corrections that need to be rectified.
President Obama, referring to the recent debt ceiling debate as a “political circus”, challenged the Republican controlled House to approve proposals he said were supported by both parties in the past with an additional “carrot” of the having cuts already identified to pay for the entire initiative. The plight of the American Jobs Act will rest on whether the House will try to wait out President Obama as he winds down his first and maybe only term and hope that the GOP can wrest the White House and the U.S. Senate in the next federal election cycle. The gamble in doing that is if the economy continues to stagnate or become worse, will voters blame the GOP for putting philosophical beliefs before trying to help create desperately needed jobs.
President Obama and Governor Quinn were essentially forced to try to do something to help the respective economies they govern. In Illinois, the July unemployment rate was 9.5%. To make matters worse, 11 Illinois companies announced (per the Illinois Worker Adjustment and Retraining Notification Act) that they plan to lay-off nearly 2,300 in the state in the next few weeks. At the federal level, the updated unemployment rate was 9.1% last month. To make that situation seem worse, it was announced that in August, the U.S. did not create any jobs, signaling a flat-lining economy that is teetering towards a “double-dip” recession in the near future.
But, there was some good news this week. According to the U.S. Department of Labor, employers posted advertisements for 3.2 million job openings in July, the most since August of 2008. Another point to consider is that although the U.S. did not create any net jobs last month, it was actually because of a continued reduction in government jobs. The U.S. private sector actually created 17,000 jobs and the U.S. public sector was reduced by 17,000 jobs last month. This trend, which should elate small government proponents is illustrated even more by U.S. Census Bureau figures that show that U.S. state and local governments eliminated 200,000 jobs between 2009 and 2010. Apparently there is some private sector job creation, but net job growth is being thwarted by drastic reductions in public sector employment.
Regardless of current job openings being advertised or whether the Illinois General Assembly reallocates the appropriations or whether the U.S. House approves the American Jobs Act, Illinois and the nation have real, dire and immediate unemployment problems. To put this into perspective, according to the U.S. Department of Labor, there are more than four unemployed people for every single public or private sector job opening in the U.S. It is a problem that Springfield and Washington D.C. will need to deal with for the balance of 2011 and probably 2012 - but hopefully not in 2013.
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