Republican Recovery Strategies Largely Ignored

Donald Lambro

7/20/2010 6:04:59 PM - Donald Lambro

WASHINGTON -- President Obama, who came into office pledging to end the toxic political infighting in Washington, is going back on the attack in a last-ditch effort to save his party from a potentially disastrous defeat in the midterm elections.

In speech after speech, as he goes about the country defending his failed economic policies, he repeats the Democrats' big lie: that Republicans are the party of "no," opposing his agenda for change without offering any constructive alternatives of their own.

Vice President Joe Biden has been peddling the same line, as he did Sunday in an interview with ABC News, saying that the GOP would take the country back to the policies of the past that led to the mess that Obama inherited, and suggesting that the Bush tax cuts caused the recession.

Nothing of course could be further from the truth, but Obama and his team seem to be getting away with these charges without the slightest challenge from the Washington news media.

Republicans have, in fact, offered numerous proposals to get the economy back on track, producing jobs and growth. They do not call for massive new government spending because they do not believe that works -- and the evidence so far says that it hasn't.

If nearly $4 trillion in annual federal spending has not fueled robust economic growth, Obama's $800 billion in new spending isn't going to do it either, and last month's below-par 85,000 new private-sector jobs tragically demonstrates that.

Instead, Republicans in Congress have been offering a number of proposals to enact tax incentives for businesses and workers to boost incomes, spur new capital investment and create many more jobs.

Last year, for example, in the midst of the legislative battle over the Obama spending stimulus bill debate, the 115-member House Republican Study Committee called for an additional across-the-board 5 percent tax cut, and lowering of the top corporate tax rate from 35 to 25 percent.

More recently, Republican Reps. Jim Jordan of Ohio and Jason Chaffetz of Utah, on behalf of the Republican Study Committee, introduced H.R. 5029, the Economic Freedom Act, which would cut the deficit and end the bank bailout program and Obama's remaining stimulus spending binge. Among this bill's other provisions:

-- Cut the payroll tax in half for the remainder of 2010, thus putting immediate cash into worker paychecks and sharply lowering each employer's hiring costs.

-- Reduce the individual and corporate capital gains tax to spur new business capital investment in the economy.

-- Lower the corporate tax rate to 12.5 percent; eliminate the death tax and provide business expense tax breaks for new equipment and technology to accelerate business reinvestment.

Few Americans know about these and many other Republican proposals -- which would provide an influx of business growth and new jobs -- because they do not get reported in the nightly network news shows.

The one proposal that has unanimous Republican support in the House and Senate is preserving the top two Bush income tax rates, which are due to expire at the end of this year with the approval of Obama and the Democrats. If that happens, the top marginal income tax rates would approach or surpass 40 percent.

Many economists and most business executives say that with the economy showing signs of weakness and sluggish job growth, this is not the time to be raising anyone's taxes -- especially on small businesses that fall into these income brackets and usually account for much of the economy's job growth.

But Obama is not only going about the country insisting that the GOP has contributed nothing constructive to the debate over how to grow the economy; he is also vastly exaggerating the results of his own recovery agenda.

The White House now claims its spending stimulus bill has saved or created about 3 million jobs, a largely bogus number (even accounting for the slippery "saved jobs" that can't be proven and the temp jobs that have long since ended).

The actual number of jobs, as monitored by the watchdog website www.recovery.gov, "is 682,370 through March 31," says Peter Morici, an economist at the University of Maryland's Robert H. Smith School of Business.

"Including the multiplier effects of workers spending earnings in the private sector, the total impact is a bit more than 1 million jobs," writes Morici in his latest analysis of the recovery that he concludes "is flagging."

"Many stimulus jobs were temporary, but more jobs have been added since March, so the total impact remains about 1.1 million temporary jobs, costing taxpayers about $700,000 each -- not a good bargain!"

Obama's "blame game" strategy, as Morici calls it, doesn't hold water. "President Obama is again blaming Republicans for blocking his agenda," he notes, "but Congress has given him his head," passing virtually his entire economic agenda.

The results: minuscule private-sector job creation that's slowed to a crawl; plunging retail sales; a weak housing industry; and a weaker economy that is paralyzed by uncertainty and fear about the future.