WASHINGTON -- President Obama is once again attacking the Republicans as "the party of no" because of the GOP's opposition to his tax-and-spend agenda that this year will add $1.3 trillion to a $13 trillion debt.
But by now, after nearly two years in office, it should be obvious that the White House and the Democrats are the party of "we don't know" how to grow the economy and create an entrepreneurial, pro-investment climate for job creation and increased incomes.
Nevertheless, with his job approval polls sinking into the low 40s and a weakened economy treading water, Obama returned to the jobless Midwest this week to defend his failed economic policies and go on the political attack in a last-ditch effort to salvage his party from what is shaping up to be devastating losses in the House and Senate.
Nearly seven weeks before the voters go to the polls to render their verdict on the Democratic Congress and his presidency, the White House has hastily taped together another stimulus package that calls for $50 billion more in public works spending, and, in a nod to Republicans, business tax cuts that the GOP and the big business community have been pushing for the past two years. The package includes a permanent extension of the research and development tax credit worth $100 billion over 10 years, and a temporary proposal to allow companies to write off 100 percent of all new plant and equipment purchases this year and next year.
These are the kind of tax cuts, worth up to $200 billion, that Obama has been criticizing as part of the "failed policies of the past," but has in the end been forced to offer as an eleventh-hour attempt to regain support in the economic debate that he has been losing to the GOP.
Both ideas have long been supported by big business, including the U.S. Chamber of Commerce and the National Association of Manufacturers, only to have the White House dismiss them out of hand as "too Republican."
But as necessary as they are, neither of them is going to move the economy anytime soon, even if the Democratic Congress were to pass them quickly, which remains doubtful. R&D expenditures will take years to filter through the economy, and it remains to be seen whether businesses, still fearful and uncertain about the economy and higher taxes to come, will be willing to use their reserve funds for new expenditures without evidence of renewed growth. Even Obama's advisers say the jobs effect of an R&D tax credit is long term. "I don't think this is something that has ... as immediate of a job impact as, say, current tax credits for the unemployed or extending a payroll tax holiday of some sort," said economist Laura Tyson, a member of the president's economic recovery advisory board.