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.But these tax-cut proposals are coming woefully late in this recession and still do not address the Mount Everest of all tax-cut issues: Obama's plan to allow the top income tax rate jump to nearly 40 percent at the end of December. If these new proposals are needed to spur growth and create jobs, why didn't he propose them at the beginning of 2009?
The president says his administration didn't fully realize the depth of the recession and how serious it was, a remarkable admission of its failure to fully grapple with the transparent realities of an economy that were there for everyone to see.
Last week, Christina Romer, the abruptly departing chairwoman of the President's Council of Economic Advisers, admitted she didn't have the slightest idea how bad the economic collapse would be, and says she still doesn't understand why it was far more severe than she expected.
"To this day, economists don't fully understand why firms cut production as much as they did or why they cut labor so much more than they normally would," she said last week at the National Press Club. Well, maybe White House economists didn't see it, but many others did.
But Republicans have made numerous pro-growth proposals on Capitol Hill and will be rolling out their jobs agenda later this month as the midterm elections get fully under way. The White House may not want to recognize this, but the voters like what they are hearing from the GOP -- including keeping all of Bush tax cuts in place at the end of the year.
A Washington Post poll published Tuesday asked voters if they think it is better to have Democrats in control of Congress to support Obama's policies or for the Republicans to be in charge as a check on the president's agenda. A whopping 55 percent said they preferred Republicans, while 39 percent said they want Democrats to keep control of Congress. The Republicans' 16-point advantage is twice what it was in July.
Call it executive inexperience, hubris or policymaking arrogance, Obama has stubbornly refused to give up on his failed $800 billion stimulus plan, defending its impotent expenditures no matter how weak the economy became or how few jobs were being created.
Now, with his party on the brink of losing control of Congress -- and his presidency in peril -- he is pulling some long-held GOP ideas off the shelf in a move that smacks of crass political maneuvering and policymaking desperation. A little too late for that now.