Obama launches political offensive on economy
President Barack Obama will next week make a new bid to stem ebbing political support over the slowing economic recovery, with visits to the struggling Midwest and a formal White House news conference.world Updated: Sep 03, 2010 08:26 IST
President Barack Obama will next week make a new bid to stem ebbing political support over the slowing economic recovery, with visits to the struggling Midwest and a formal White House news conference.
Obama's economic team is meanwhile considering a raft of new measures to inject impetus into the economy, which a report said could include tax breaks for businesses that could potentially reach hundreds of billions of dollars.
But with little appetite in Washington for a massive new round of government stimulus spending, with congressional elections looming in November, the White House said there would be no repeat of massive 2009 Recovery Act.
Obama will visit two states, Wisconsin and Ohio next week, which have both been hit hard by the recession, and include crucial political races as Democrats battle to cling onto their majorities in Congress.
On September 10, Obama will hold his first White House news conference since late May, as fears mount that the slowing recovery augurs a period of prolonged economic stagnation.
News of Obama's new mini economic offensive emerged on the eve of the Labor Department's release of August unemployment figures, with some analysts predicting the jobless rate could climb above its current 9.5 per cent.
The White House ruled out framing an "extraordinary" economic stimulus plan to fire up the recovery -- along the lines of the Recovery Act passed last year which a recent estimate put at $ 814 billion.
But the Washington Post later reported that the administration was considering new tax breaks for businesses potentially worth hundreds of billions of dollars.
A temporary payroll tax holiday could allow businesses to keep $ 300 billion they would have otherwise handed to the government.
A permanent extension of the research and development tax credit could cost $ 100 billion over the next 10 years, the Post said.
Officials however responded that no firm decisions had yet been taken, but that Obama was pressing his team for new ideas.
"There have been a lot of reports and rumors on different options being considered -- many of which are incorrect," said Amy Brundage, a White House spokeswoman.
"The options under consideration build on measures the President has previously proposed, and we are not considering a second stimulus package."
Earlier Obama's chief spokesman Robert Gibbs had said that a "big, new stimulus plan is not in the offing."
The sluggish recovery is bound up with slower-than-hoped for jobs growth and has helped to depress Obama's public approval ratings into the mid-40s, a factor weighing heavily on his party as the election nears.
Republicans brand the stimulus plan a huge waste of taxpayer money that has failed to meet the administration's rosy jobs and growth projections.
Obama however, argues that he inherited an economy in deeper trouble than anyone thought in 2009, and that the bill did nothing less than stave off a second Great Depression.
Four straight quarters of economic growth mean the economy, though still wounded, is convalescing, he says.
However, the government last month slashed second quarter growth figures to 1.6 per cent from 3.7 percent in the first quarter, stoking fears of sluggish future expansion and even a double dip recession.
With many lawmakers fretting as elections loom, public concern mounting over the forecast $ 1.4-trillion budget deficit and Republicans mounting obstruction tactics, Obama's political leeway on the economy is limited.
Top of his wish list is an existing package that would cut taxes and loosen credit for small businesses in a bid to unleash job creation.
The bill has been mired in Congress for weeks, and the administration has been pleading with lawmakers to pass it, as grim economic data has piled up and soured what the White House had termed "Recovery Summer."
Democrats are also planning votes in the coming weeks on extending tax cuts passed during the presidency of George W. Bush for businesses and families earning less than 250,000 dollars a year.
But they want to let cuts on those earning more than that expire, sparking a row with Republicans who argue the move will crimp spending and slow growth.