Hooray, We’re Treading Water!; Dems Get Jump on GOP on Debt Supercomittee; Gloomy Obama A Downer for Voters
When Bad News Looks Good, You Know You’ve Got Trouble
-- Estimated U.S. economic growth rate in July, September and August.
The good news is that the economy didn’t tip into an official recession. But the bad news is that it’s still not really growing. A growth rate of 2.5 percent, especially after coming off of two weaker quarters before it, is kind of treading water.
Anything under 3 percent isn’t enough to start moving the nation ahead.
Though the number may later be revised downward, as is often the case, 2.5 percent will please economists who worried that we might have gone down the tube in September, but as the president is discovering, “It could have been worse” isn’t much of a rallying cry.
While the administration forecast in the heady early days of stimulus and “a new foundation” that growth by now would be in the 4 percent range, the result has been mostly sputtery.
President Obama puts a lot of the blame on the slow-motion European debt disaster and currency collapse as well as fiscal brinksmanship with the divided Congress. Conservatives, meanwhile place a lot of blame on the uncertainty sewn by the initiatives Obama was successful in implementing – a health law and a slew of bank restrictions – and promises to yet implement – a $2 trillion tax increase on upper earners and further increasing the cost of using fossil fuels.
Maybe they’re both right, but whatever is doing it, the economy is still not showing signs of actual recovery. While the president points out that recessions caused by financial panics tend to be longer and deeper, the current situation goes beyond even that. There’s more at work here than just tight credit and the result is that unemployment will almost certainly be above 7 percent a year from now.
What’s concerning to Democrats, though, is that the only modern president to get reelected with unemployment so high, Ronald Reagan, was riding a growth rate of more than 7 percent as well. Stagnation and stubborn unemployment won’t do the job for Obama no matter how expensive, ugly or effective his campaign is.
Dems Steal a March on GOP With Deficit Leak
“When somebody starts out a negotiation by trying to embarrass you in public, it isn’t exactly an encouraging sign.”
-- Senior House Republican aide on a Democratic leak that their members on the debt-ceiling supercomittee were proposing reducing the increases in future deficits by $3 trillion instead of the requisite $1.2 trillion.
Sen. John Kerry, D-Mass., looked very pleased with himself at Wednesday’s public meeting of the debt-ceiling supercommittee charged with finishing the work of the borrowing deal struck in August.
With Democratic sources already going hither and yon with a leak about the proposal from the party’s six members on the panel, Kerry repeatedly asked Congressional Budget Office boss Douglas Elmendorf to offer opinions on a “hypothetical” proposal that would reduce the increases to future deficits by $3 trillion.
What Democrats are pushing is a plan that includes further reductions to the outlays from the federally subsidized old-age health-insurance program Medicare, already set to be trimmed under President Obama’s health law. Those reductions in payments would be coupled with reductions in the rate of increase in discretionary spending to achieve two thirds of the Democratic goal.
The remaining reduction in increased deficit spending would come from tax increases.
But Democrats also want to use the monies for a current stimulus package that would, they say, spur consumer spending and help revive the stagnant economy.
Republicans, of course, hate almost all of that.
While GOPers on the committee are open to the idea of closing some tax loopholes in the name of a simpler tax code with lower rates, a decade of tax increases to finance more stimulus spending now and make good on an already approved debt-limit hike is a non-starter.
And while Republicans are always barking for “entitlement reform,” they are talking about changes to eligibility for programs, not just cutting the payments to doctors and hospitals. GOPers believe that the Obama Democrats’ approach of controlling costs by cutting payments to Medicare providers will expedite the nation’s doctor shortage and lead to the kind of two-tiered public/private health system they have in Britain in which middle-class citizens are trapped in a government-run program while the wealthy can afford to pay their way into superior care.
Republicans want to see eligibility ages increased or some form of means testing for benefits, not just cost controls.
But the point of Kerry’s questioning and the Democratic leak wasn’t to enact their measure (which sounds substantially like what the president has had on offer for some months). The point is to create a pressure point for Republicans by establishing themselves as interested in a big plan while GOPers are obstructionists.
By jumping out first, Democrats are helping ensure that the establishment press narrative will be that while the blue team wants to save the nation from the debt monster, Republicans are protecting “millionaires and billionaires.”
The deadline for the supercommittee is fast approaching. They need to start having pieces of a package to be scored by Elmendorf’s crew in a week or so.
The most likely outcome is that while Democrats talk about going big by cutting payments to doctors and hospitals and increasing taxes, the actual work of meddling with projected discretionary outlays will continue with the green-eyeshade set pulling in every possible source of existing revenue and every expenditure so that they can massage a bare-minimum cut.
Republicans may respond with their own “big” plan at some point, which, as was the case with the original Cantor-Biden debt-limit negotiations, will rely on the mutually identified cuts arithmetic.
Then, both sides abandon their big stuff and agree on the smallness left on the table. That will still be tough to do by year’s end, and certainly isn’t made any easier by the chest-puffing that precedes it.
Obama Gloom Won’t Help Revive Re-Election Hopes
“Anybody been to Beijing Airport lately? Or driven on high-speed rail in Asia or Europe? What’s changed? Well, we’ve lost our ambition, our imagination, and our willingness to do the things that built the Golden Gate Bridge and Hoover Dam and unleashed all the potential in this country.”
-- President Obama speaking at a San Francisco fundraiser on Tuesday.
President Obama says Americans have “lost our ambition, our imagination,” because we no longer engage in huge public works projects like the Golden Gate Bridge or the Hoover Dam.
It is a strange thing for him to lament since his own stimulus measures have been focused more on expanding and maintaining government payrolls rather than taking on new public works projects like those Depression-era icons. But Power Play gets what Obama means. The president thinks we have “gotten a little soft” and need to start strengthening ourselves with government spending.
But my goodness, what a gloomy way to campaign for re-election!
This political note certainly understands the strategy of the president embracing the underdog status and also trying to elevate the worries of the electorate in a bid to lower expectations for his own performance and to make it easier to disqualify whomever his Republican opponent is. This, however, sounds more like defeatism than declinism.
Power Play has never been to Beijing’s airport but has ridden European railroads and can say they are way nicer than Amtrak. But most Americans don’t envy these countries their public works projects, certainly not compared to our standard of living and freedoms.
Obama pining for the public transportation of other less-free places and using them as a measure for American greatness is not going to win him any new friends in the skeptical center.
And Now, A Word From Charles
“This is in keeping with all the promises he has been making in the past campaign tour in which he promises relief to homeowners in a program which has already failed, and now he is doing it on student loans. If his audience known how minuscule was the benefit, he would have been laughed out of that auditorium.”
Chris Stirewalt joined Fox News Channel (FNC) in July of 2010 and serves as politics editor based in Washington, D.C.