Washington Extra – Driver’s seat
The day the Congressional Budget Office forecast that the United States is headed for its fourth straight year with a $1 trillion-plus budget deficit, President Obama touted the benefits of big government spending.
His venue? The Washington auto show. His tools? Shiny new American cars, preferably those from General Motors and Chrysler. Those were the two companies that received billions in a 2009 taxpayer funded bailout that has obviously paid off, both for the automakers and the Obama administration.
The president got behind the wheels of muscle cars, SUVs, trucks, and fuel efficient and electric models and proclaimed “The U.S. auto industry is back.” But he couldn’t just leave it at that, for there were more political points to score. He did so by taking a veiled swipe at his most likely opponent in the November election – Mitt Romney – for having opposed the bailout that helped bring Detroit back from the brink.
“It’s good to remember the fact that there were some folks who were willing to let this industry die,” Obama said.
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Perry says stimulus didn’t create jobs; CBO says it did
Texas Governor Rick Perry, front-runner in the race for the Republican presidential nomination, said on Monday President Barack Obama’s economic stimulus program created “zero” jobs.
Not so, according to the Congressional Budget Office, the non-partisan budget arbiter for lawmakers.
Congress in 2009 passed the $830 billion economic stimulus, known as the American Recovery and Reinvestment Act, which included both spending measures and tax cuts.
According to the CBO:
- As of June, between 1 million and 2.9 million Americans owed their jobs to the recovery act.
- In the second quarter of 2011 the recovery act added or preserved 550,000 full-time jobs.
- The recovery act brought down the unemployment rate by between 0.5 and 1.6 percentage points in the second quarter of 2011.
The Texas governor, who has touted his jobs creation record, gave his assessment of the U.S. economic stimulus program during Monday’s CNN/Tea Party sponsored Republican candidates debate in Tampa, Florida.
Perry shared the stage with former Massachusetts governor Mitt Romney, Minnesota Rep. Michele Bachmann, Texas Rep. Ron Paul, business executive Herman Cain, former Pennsylvania Sen. Rick Santorum, former Utah governor Jon Huntsman and former House Speaker Newt Gingrich.
Txhman, you are incorrect. Texas and Parry gave back zero.
Washington Extra – Painful choices
When it comes to framing economic policy, it looks increasingly as though Republicans are winning the debate. Not only have they made “stimulus” almost a dirty word but there seems to be a growing feeling that deficit-financed spending is not a great way to pull the economy out of a recession. Forget the conclusions of the bipartisan Congressional Budget Office about how the bailouts and stimulus of 2008 and 2009 saved millions of jobs. Forget the global consensus around the need for coordinated stimulus after the financial crisis. The American public is simply not convinced.
The Reuters/Ipsos poll released today found 57 percent of Americans believe that, when economic times are tough, cutting the deficit is a better way to create jobs than deficit-financed stimulus.
With the U.S. congressional elections just six weeks away, this finding is bad news for President Barack Obama as he struggles to convince people that Republicans drove the economy into a deep ditch and Democrats are hard at work pulling it out.
But there could be a silver lining, if broad public concern about the deficit forces Americans to confront some tough choices after the Nov. 2 election.
Right now, Democrats and Republicans seem to be miles apart on economic policy. But there is at least a chance they may find common ground in 2011 over the need to get government spending under control. Tough choices mean politicians are going to have to be honest about economic realities and about the need for shared sacrifices because, as Bruce Josten of the U.S. Chamber of Commerce told the Reuters Washington Summit, “it’s not going to be a pain-free exercise.”
“At some point you’re going to move beyond these kinds of sound bite throwaways, pull the pin out of the grenade and throw it across the table and scare the bejeezus out of everybody — and get real,” Josten said.
Finally today, as predicted by Washington Extra a couple of weeks ago, Larry Summers is on his way out. Summers will step down from his job as director of the White House National Economic Council at the end of the year and return to his position as professor at Harvard University, officials say.
Washington Extra – swimming with the fishes
The U.S. economy continues to swim with the fishes – weekly unemployment claims are at a nine-month high and the director of the Congressional Budget Office says the unemployment rate won’t fall to around 5 percent until 2014. Not much in the way of economic sunshine today.
President Barack Obama commented on the economic cloud before heading to Martha’s Vineyard where his family is taking their end-of-summer vacation.
We’re wondering if the Secret Service will allow the First Family to frolic in the waters off the Massachusetts island given that several great white sharks were spotted close to the Cape Cod shore at the end of July. Remember, “Jaws” the movie was filmed on Martha’s Vineyard (it’s hard to write out the movie sound of the shark approaching, but you get the picture).
Onshore there will undoubtedly be golf outings for the First Golfer in what is a truly natural setting — as The New York Times pointed out earlier this week, the Vineyard Golf Club is a completely organic course. Perhaps they also serve arugula salad for lunch.
Here are our top stories from today…
More tough economic times forecast by CBO
The U.S. economy faces even more difficult times ahead with chronic unemployment and slow manufacturing hurting the recovery, the head of Congress’ budget agency said. The warning from the non-partisan Congressional Budget Office came on top of more bad economic data that heightened concerns about a return to recession. It could also spell trouble for Democrats facing November elections.
Washington economic indicator: political finger-pointing
How do you know the economy is souring?
One indicator that doesn’t come wrapped in a government report is political finger-pointing.
It’s an election year with a sluggish economy and so Republicans and Democrats want to make sure voters know it’s the other’s fault — or at the very least not their own fault.
Take a look at the response to the jobless data today which showed weekly unemployment benefit claims reached a nine-month high.
President Barack Obama, before leaving for Martha’s Vineyard, said the weak economic data underscored the need for small business lending legislation that is stalled in the Senate.
“This is a bill that makes sense and normally we would expect Democrats and Republicans to join together,” Obama said at the White House. “Unfortunately, a partisan minority in the Senate so far has refused to allow this jobs bill to come up for a vote.”
Republican National Committee Chairman Michael Steele had a different interpretation. “This month’s jump in jobless claims may have surprised some economists, but it’s no surprise to the American families who are struggling to adjust to the Obama economy,” he said in a statement. “With unemployment claims hitting a nine-month high and a struggling housing market, middle-class Americans are losing faith in the Democrat leaders at the helm of our country.”
The First Draft: Bernanke, budget trump vacation – for a bit
Two days after arriving in Martha’s Vineyard, President Barack Obama is taking a break from his vacation to make some news: he will announce that he is nominating Ben Bernanke to a second term as chairman of the Federal Reserve.
Investors have given Bernanke, whose current term expires on Jan. 31, 2010, high marks and had widely expected his reappointment.
But the announcement is being made earlier than expected and comes not just during Obama’s family vacation but also on the day that the White House Office of Management and Budget and the non-partisan Congressional Budget Office both release their midyear budget updates.
The reports are expected to show the government will spend a record $1.6 trillion more than it collects this year and nearly double its outstanding debt over the next 10 years.
The grim fiscal picture could provide fodder for opponents of Obama’s costly plan to overhaul the healthcare system.
So why is Obama interrupting his vacation to announce Bernanke’s renomination? Does he hope to inject a sense of continuity and stability by erasing doubt over who might lead the Fed?
First Draft: Obama courts Republicans on the Hill
For the second Tuesday in a row, President Barack Obama heads up to Capitol Hill. Last week it was to be inaugurated. Today it’s to woo Republican lawmakers and try to build momentum for the $825 stimulus package.
Faced with growing economic problems, as more big companies lay off workers and troubles mount in the housing and financial sectors, Obama will meet with House and Senate lawmakers to build support before debate begins on Capitol Hill on the stimulus package.
He will have separate meetings with the House Republicans and Senate Republicans in the early afternoon. The White House says the meetings are to “seek input” on the stimulus plan. The House and Senate are expected to approve the package by the middle of next month regardless of whether Republicans embrace it.
The Congressional Budget Office issued a report late on Monday saying the stimulus package falls billions of dollars short of Obama’s goal to pump most of the money into the economy quickly.
Timothy Geithner, who was approved by the Senate as Treasury Secretary, was sworn in on Monday night and he vowed quick action to help fix the economy.
On the morning talk shows: A California woman will now have to feed and dress one extra baby. She shocked doctors — who had expected her to have seven babies – by giving birth to octuplets.
So Jimbo, you are saying you know everything there is about Geithner’s tax holiday? You are so naive.
It was not an oversight. Also, he should have paid for the four years and not only two. We wouldn’t get away with not paying for the full four years.
Why would you make excuses for someone who clearly did not pay his taxes and even if he did it by accident, why didn’t he do the right thing and pay all of his back taxes?
Unbelievable how the only thing apologists like you do is start your venom on Bush. Well, this has nothing to do with Bush, this is about Obama’s choice to head the Treasury (which includes the IRS). He didn’t pay his taxes and still hasn’t.
