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Don't forget deficit in rush to create jobs

By Gloria Borger, CNN Senior Political Analyst
  • Gloria Borger: Candidates know voters care more about unemployment than the deficit
  • Borger: Obama reasons that new jobs mean revenue, which brings the deficit down
  • TARP surplus will fund jobs creation, instead of bringing down deficit, Borger says
  • She writes that deficit can't be ignored, and can't be left to Capital Hill alone

Editor's note: Gloria Borger is a senior political analyst for CNN, appearing regularly on CNN's "The Situation Room," "Campbell Brown," "AC360°" and "State of the Union With John King," as well as covering special events.

(CNN) -- If you're a Democratic political adviser right now, you've got one major question heading into the 2010 midterm elections: Do voters worry more about the skyrocketing deficit or high unemployment?

The answer: unemployment.

In fact, according to a recent survey done by Democracy Corps, a Democratic research firm, Americans worry twice as much about jobs as the deficit: "...When forced to choose, voters embrace a bold jobs initiative over a long-term deficit reduction program by two-to-one."

Ipso facto, a new jobs bill is born.

Never mind that the first stimulus package has yet to truly kick in. Or that, within the next month, the Senate has to hold its nose and vote to raise the federal debt limit above its current $13 trillion level. That's a tough vote, even for big spenders.

In his economic speech Tuesday, President Obama managed to pay homage to the arguments against new spending from the deficit hawks.

"There are those who claim we have to choose between paying down our deficits on the one hand and investing in job creation and economic growth on the other," he said. "But this is a false choice." New jobs mean new revenues for the government, and that brings the deficit down.

Or, as a top White House adviser told me, "Economists understand that you don't want to take money out of the economy right now. You need to put it in."

OK, so where do we get the money to put into the economy? After all, there aren't many pots of gold available these days. But there is TARP, the unpopular Wall Street bailout fund which the president says turned out to be cheaper than anticipated -- to the tune of $200 billion.

But at some point, the administration is going to have to show it's serious about deficit reduction.
--Gloria Borger, CNN Senior Political Analyst

So instead of using the money to pay down the deficit, as was initially anticipated, it's going to be used to create jobs. Republicans are squawking that this is little more than a political "slush fund," as GOP Texas Sen. John Cornyn put it.

GOP histrionics aside, the use of TARP money is a political choice. Why? Because it's there, and it's easy. As one senior administration official told reporters, the smaller-than-anticipated cost of the bank bailouts gives them "fiscal room" for both spending and working to reduce the deficit. Ah, having it both ways.

But at some point, the administration is going to have to show that it's serious about deficit reduction. And it can't wait much longer, since it sends its budget to Congress in February.

What's more, 13 moderate Democrats have already groused -- in a letter to Senate majority Leader Harry Reid -- that the administration needs to show some commitment to deficit reduction. Their not-so-veiled threat: We won't give you the votes to raise the debt ceiling unless you support a strong deficit commission to come up with ways to get the fiscal house in order.

Good for them.

Now all that the White House, and House Democrats, have to do is endorse the idea. It's got to be a group of serious legislators, perhaps some who have decided not to run for re-election.

It's got to have teeth and be binding, like the commission on closing military bases. And it should be proposed in the president's State of the Union address in late January.

Sure, congressional barons and administration pooh-bahs don't want their power -- or their control -- reduced, particularly on matters like spending and taxes. As a result, some folks within the administration, as well as House Democratic leaders, want an "advisory panel" that would have no real power beyond making suggestions.

Sad to say, the time for run-of-the-mill blue ribbon commissions is long gone, especially in this political environment. Besides, the White House needs an off-ramp, a way to ensure that deficits start coming down and a way to make sure that all can share the blame for the tough decisions ahead.

That won't happen if it's left to Capitol Hill alone. Just look at the edifying health care debate.

So it's come to this: the need to outsource serious economic decisions. Otherwise, who will save us from ourselves?

The opinions expressed in this commentary are solely those of Gloria Borger.