Tales from the Trail

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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U.S. set for 4th year of $1 trillion-plus deficit-CBO

The United States is headed for a fourth straight year with a $1 trillion-plus budget deficit, congressional forecasters said, giving Republicans ammunition to hammer President Obama’s spending record. The CBO report is the opening salvo in the 2012 debate over the appropriate size of the federal government in coming years and whether the wealthy should shoulder more of the burden in fixing a fiscal mess highlighted by a national debt that has topped $15 trillion and is racing higher.

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.

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.jobless 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.

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.

USA/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).

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. OBAMA/

The First Draft: Bernanke, budget trump vacation – for a bit

OBAMA/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.

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.