Obama's growing credibility gap

Donald Lambro
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Posted: Jul 14, 2009 9:01 PM

WASHINGTON -- If you want to know what Middle America thinks about President Obama's economic policies, go to Ohio where things are about as bad as anywhere else in the country.

Obama carried Ohio by nearly 51.4 percent of the vote largely on his pledge to pull the state's long-suffering economy out of its recession. But in the past five months, the nation's unemployment rate has climbed toward 10 percent, and Ohio's was approaching 11 percent. And the most recent Quinnipiac poll now shows Ohioans disapprove of Obama's handling of the economy by 48 percent to 46 percent. The sharp decline in Obama's scores stunned the White House, which quickly sent Vice President Biden into the state to urge patience -- saying it was going to take more time, maybe until the end of next year for Obama's painfully slow, trickle-down spending stimulus to turn things around.

But clearly, Obama's scores on the economy, which were down from a 57 percent approval rating in May, have precipitously eroded in Ohio.

Significantly, his overall job-approval scores between June 26 and July 7 have fallen sharply in Ohio to the point where only 49 percent of voters approve and 44 percent disapprove.

"These numbers indicate that for the first time voters have decided that President Obama bears some responsibility for their problems," said Peter A. Brown, assistant director of the Quinnipiac University Polling Institute.

But the numbers reflect something deeper: growing doubts among the electorate about Obama's big-spending economic agenda. Voters bought into it in November, but now they're beginning to question how spending the nation more deeply into debt and raising taxes on a weakened or even recovering economy can create more jobs.

Americans remain intuitively distrustful of government and its promises, and they harbor doubts about the draconian level of taxes that Obama and the Democrats want to inflict on the economy at large -- and small businesses in particular -- to pay for a massive-spending agenda they intend to enact in the middle of a severe, job-killing recession.

The Democratic-run House Ways and Means Committee was putting the finishing touches on an income-tax surcharge of up to 3 percent on incomes over $250,000 that will push the top tax rate to well over 40 percent -- up from 35 percent today.

When you add Medicare payroll taxes and state income taxes to the mix, the top income-tax rate would be more than 45 percent if House Democrats have their way.

But this won't just hit wealthier Americans with high salaries; it will also strike at small-business owners who pay their business taxes through their 1040 forms just like any other individual American. One-third of them employ anywhere from two to 100 employees. Overall, small businesses are defined as companies that can employ up to 500 workers. These businesses employ most of America's workers. They would be slapped with an onerous tax hike at a time when many of them are either closing their doors or laying off workers, and the rest are just struggling to survive.

"With unemployment nearing double digits nationwide, the last thing we need is a massive tax hike that will punish small businesses and cost even more American jobs," House Minority Leader John Boehner of Ohio said last week.

But that may be the least of their troubles if the House Democrats healthcare plan passes the House with its mandates on small businesses to provide medical-care insurance coverage for their employees that they cannot afford and that would put many of them out of business.

Nancy Pelosi's evolving healthcare plan was too much even for the conservative Blue Dog Democrats in the House -- notorious for being all bark and no bite -- who raised their objections last week to its massive costs and impact on small businesses. A majority of their 52 members would vote against it unless major changes were made, Blue Dog leaders said.

The soak-the-rich-and-small-business Democrats were busy over in the Senate, too, where they were considering a long line of tax increases to pay for Obama's nationalization of the healthcare system: a "millionaires" tax, a tax on employee health benefits for higher-income workers and a 1.5 percent Medicare tax on capital-gains income. Others were proposing a value-added tax (VAT) or a national sales tax.

If you think it is the height of fiscal irresponsibility to be raising taxes in the midst of a struggling economy where unemployment is headed into double digits, you're right. This is crazy.

This is not a time when we should be talking about raising anyone's taxes -- middle income or upper income. This is a time when we need all of the economy's oars in the water pulling together, especially upper-income investors whom the Democrats want to tax into oblivion.

This economy is desperately in need of tax-cut incentives to unlock an infusion of private-investment capital to help job-creating entrepreneurs and existing businesses survive what is likely to be many months of economic anemia and turmoil.

But I sense that the political mood in the country, as we see in Ohio, has begun to turn against Obama and his tax-happy, spending-binge allies on Capitol Hill. He's losing his credibility on the core economic issues of our time, and that in the long run is going to spill over into the rest of his agenda as well.