Jobs report highlights politicians’ power to kill recovery

Almost three years after it hit bottom in mid-2009, the economy has recently been showing signs of entering a virtuous cycle in which rising employment, consumer spending and business activity reinforce one another. Even with March’srelatively meager 120,000-job increase, the three-month average gain comes to about 212,000. That’s more than enough to make a dent in the unemployment rate, which fell to 8.2 percent in March from 8.3 percent in February.
If the strengthening trend persists, the U.S. could become an engine of growth just in time to help offset a slowing in the rest of the world. Still, as the latest employment report demonstrates, the U.S. isn’t out of the woods. We’ve seen false dawns before, and the recovery remains weak. The job growth in March fell far short of expectations, and a decline in the number of people looking for work drove the drop in the unemployment rate.
More important, the economy faces some daunting man-made obstacles. Under current law, the expiration of Bush-era tax cuts at the end of this year will add about $4 trillion to Americans’ tax bills over 10 years. An additional $1.2 trillion in automatic spending cuts could take effect as a result of last year’s debt-ceiling deal. At the same time, stimulus measures such as payroll-tax breaks and extended unemployment benefits are scheduled to end.
We recognize that a new round of stimulus is a political nonstarter in this election year. At the very least, though, President Barack Obama and Congress should refrain from doing exactly the opposite of what is advisable. If they can muster the responsibility to make a deal before the end of the year that extends the Bush tax breaks in return for a postponement of spending cuts, they would greatly increase the recovery’s chances of survival.