Today’s shockingly bad employment report presented both a problem and an opportunity for President Barack Obama.

The problem, of course, is that job creation has stalled in the U.S. Only 18,000 jobs were created in June, and the unemployment rate increased to 9.2 percent. That’s bad for workers, bad for business, and bad for Obama’s reelection chances. It also complicates his negotiations with Republicans for a deficit-reduction deal because it gives the GOP more ammunition for their argument that now is not the time to increase taxes.

Obama, however, also used the employment report as an opportunity to push Congress to pass pending legislation that could create jobs:

• A transportation bill that could provide jobs to some of the 1 million construction workers who lost their jobs when the real estate market collapsed;
• A patent reform bill that could help entrepreneurs get their innovations to the market faster;
• Free-trade agreements with South Korea, Colombia, and Panama, which could help U.S. companies increase exports
• A one-year extension of this year’s payroll tax cut for workers, which would give families more money to spend.

All of these steps have bipartisan support and could pass immediately, Obama said.

“I urge Congress not to wait,” he said.

The president said today’s employment report confirms that “we still have a long way to go and a lot of work to do to give people the security and the opportunity that they deserve.”

“Our economy as a whole just isn’t producing nearly enough jobs for everybody that’s looking,” he said.

Obama said the past two months of subpar employment growth are partially due to headwinds the economy has experienced this year: natural disasters, rising gasoline prices, and layoffs by state and local governments. Plus, the Greek debt crisis and the uncertainty over whether Congress will raise the U.S. government’s debt limit have “made businesses hesitant to invest more aggressively,” Obama said.

That’s why it’s important to reach a deal quickly to increase the debt limit while taking steps to rein in federal deficits, he said.

The sooner this happens, “the sooner we give our businesses the certainty they need to make additional investments to grow and hire,” Obama said.

“I’m ready to roll up my sleeves,” he said.

Business groups agreed with Obama on the need to invest in transportation, pass free-trade agreements, and reach a deal to raise the debt ceiling. But they’ve also got other suggestions on how to help businesses create more jobs.

“We need to get moving on increasing domestic energy, which will create jobs in America, reduce our reliance on foreign oil, and generate revenue for the government,” said Tom Donohue, president and CEO of the U.S. Chamber of Commerce. “We need to speed up the permitting process so projects can get under way more quickly and remove other regulatory barriers that are weighing down the economy.”

“The White House needs to wake up,” said Karen Kerrigan, president and CEO of the Small Business & Entrepreneurship Council.

“A sputtering economy, the lack of pro-growth policies from Washington, along with economywide regulations and the threat of new taxes do not create the type of environment conducive to job creation,” she said.

House Speaker John Boehner also cited excessive regulation, as well as the federal government’s huge debt, as reasons why businesses aren’t hiring more workers. Any tax hikes would make businesses even less likely to increase hiring, he said.

Left-leaning organizations, however, said the lesson from today’s jobs report is that government needs to increase spending, not reduce it.

“Budget austerity is crippling the recovery,” said Roger Hickey, codirector of Campaign for America’s Future.

“Our country can’t expand private growth when the states are firing teachers, police, and other public servants,” Hickey said. “Business won’t invest until they see customers ready to buy their products.”

---

Kent Hoover is the Washington bureau chief for bizjournals.