The Obama Economy Is Collapsing And It's Going to Get Worse

Donald Lambro
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Posted: Jan 13, 2016 12:01 AM
The Obama Economy Is Collapsing And It's Going to Get Worse

WASHINGTON - Republicans kept their 2014 promise to the voters who put them in control of Congress, passing legislation to repeal Obamacare.

The bill, which also blocked federal funding of Planned Parenthood, easily passed the House last week by a vote of 240 to 181, after having passed the Senate last month, 52 to 47 along party lines.

When the bill reached President Obama's desk, he promptly vetoed it. But that isn't the end of the GOP's long battle to replace Obamacare with a healthcare reform bill that won't drive up insurance premiums and bankrupt our country.

House Speaker Paul D. Ryan promised to take the fight to the next step. While neither chamber had the votes to override Obama's veto, he said the House would hold a vote to override anyway, "taking this process all the way to the end under the Constitution."

"If there is one story that is being told here today," he said following the House passage of the repeal bill, "it is this:

"The idea that Obamacare is the law of the land for a long time is a myth. We will see this law either collapse under its own weight, or we will see this law, in the next session of Congress… be repealed and signed and replaced, by a Republican president."

For Ryan and his new team of Republican leaders, this is the beginning of an election year process to show that the GOP has put their divisions behind them and is making the legislative process work.

And that the only impediment to good government is a Democratic president who has vetoed the bill to complete construction of the Keystone XL pipeline and blocked pro- job tax cuts.

Among the GOP bills waiting in the wings is a sweeping overhaul of the tax code to cleanse it of costly loopholes and corporate welfare, plowing the savings into cutting the tax rates for businesses and individuals to boost economic growth, job creation and business investment.

Other areas awaiting legislative action include welfare and entitlement reforms, and an alternative to Obamacare.

What Ryan wants to do this year is return to "regular order," passing all 12 appropriations bill one by one that allow floor votes on amendments sought by members of the House GOP conference.

"That's the whole purpose of having a bottom-up organic process in Congress, not a top-down leadership," Ryan said at a news conference last week.

"I'm decentralizing power of this place. And when you decentralize power, you have a group decide these things," he said.

Ryan and the rest of the GOP leadership do not expect Obama and the Democrats to embrace their proposals to cut taxes to spur economic growth. They rarely focus on the economy or jobs -- except in an occasional speech where Obama cherry picks good data, but ignores other gloomy statistics such as declining economic growth.

By and large the White House and the Democrats are ignoring the economy, and with good reason. Much of it is bleak.

Last week, the U.S. Bureau of Labor Statistics reported that payroll employment rose by 292,000 in December.

But dig down into the fine print of its report, and the employment figures aren't so good.

"The number of unemployed persons, at 7.9 million, was essentially uncharged in December," the BLS said.

Black unemployment stood at 8.3 percent. For working age teenagers, it was over 16 percent. For Hispanics it was unchanged at 6.3 percent.

"The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 2.1 million," BLS said.

"And the number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed at 6.0 million."

These long-time victims of the Obama economy want full-time employment, but were working part-time "because their hours had been cut back or they were unable to find a full-time job." the government said.

Then there were another 2 million unfortunate people who were "marginally attached to the labor force" but were not counted as unemployed, even though they had looked for a job in recent months. The reason: they hadn't searched for a job in the last several weeks.

Among them, there were 663,000 discouraged workers who have stopped looking for a job because they believed there were none available for them.

The real shocker in the Obama economy lately has been the decline in manufacturing activity and inventories as businesses push to reduce their stockpile of unsold goods.

Economists said that this, among other weaknesses in the economy, signaled much weaker fourth quarter growth.

The economy's gross domestic product, the broadest measurement of the nation's economy, grew at an anemic 2 percent in the third quarter. And its getting weaker.

The Commerce Department said Friday that wholesale inventories, in both durable and nondurable goods, fell to 0.3 percent.

Its report "added to weak data on construction spending, export growth and manufacturing that have suggested GDP growth braked sharply in the final three months of 2015," Reuters reported.

Estimates of fourth quarter GDP growth have ranged from 1.1 percent to as low as 0.4 percent.

The Atlanta Fed's GDP Now model is projecting GDP grew by an anemic 0.7 percent in the fourth quarter. In other words, the economy is barely breathing.

Economists at Barclays last week were also projecting GDP will come in at 0.7 percent, dealing a devastating blow to the administration's rosier outlook.

Other forecasters are saying the economy isn't going to improve anytime soon, facing an even rockier year ahead, and giving the GOP another opportunity to strengthen their control of Congress and win back the White House.

Stay tuned.