Obama's Too-Small Steps on the Economy
The Obama team’s discussions about cutting taxes, as well as the president’s speech in the Rose Garden on Monday on what needs to be done in order to promote economic growth, are small first steps in the right direction.
But they are only small steps.
To be sure, moving the focus away from President George W. Bush as the source of our economic problems to the battle over small-business funding is a step in the right direction. Indeed, Obama simply does not have the luxury of blaming Bush for every ill that the U.S. economy now faces.
The administration has yet to offer any other new proposals to promote economic growth, encourage hiring, and facilitate job creation.
Voters are interested in the here and now, not what came before.
Seventy-six percent of respondents in a recent Fox News poll said it is time for the Obama administration to start taking responsibility for the condition of the economy.
At the same time, with Republican confidence ratings as low as the Democrats’ on the economy, it is entirely appropriate, reasonable, and responsible for Obama and his administration to hold House Minority Leader John Boehner and the Republicans accountable for their failure to address America’s economic woes.
It is all well and good to call for a replacement of economic adviser Larry Summers and Treasury Secretary Tim Geithner, but in the absence of an economic plan of their own, the Republicans remain vulnerable.
Indeed, by creating the beginnings of a confrontation on the GOP’s “blockade” of the Democratic measure to aid businesses through tax cuts and increased lending, the Obama administration has taken a step in the right direction.
But make no mistake, it is a small step, and the administration has yet to offer any other new proposals to promote economic growth, encourage hiring, and facilitate job creation. Spending more on infrastructure, which Obama is weighing now, has a short-term impact and will not produce long-term economic growth like private-sector job creation.
Make no mistake, the American people are looking for a much more broad-based economic agenda from the administration focused on revitalizing the economy and holding the line on spending.
Put directly, the administration has to speak on a number of issues if it is going to outline an economic agenda, which is an essential for the fall campaign.
Specifically, the administration should:
1. Extend the Small Business Innovation Research program, and expand lending through the Small Business Administration’s loan program to encourage more startups and enable small businesses to hire and train more workers
2. Declare a payroll tax holiday for new businesses so they can invest in new jobs.
3. Jump-start the economy by investing in green technology and create new jobs and make the United States a leader in clean-energy manufacturing, especially solar, and expand the innovation and development of renewable energy.
4. Expand the federal research-and-development tax credit to businesses that invest in research and development, and increase research grants to small businesses that are developing new technologies.
5. Create a National Infrastructure Bank that will take infrastructure decisions out of the hands of politicians and out of the world of pork barrel politics, end the infamous “bridges to nowhere,” and make infrastructure decisions that contribute to growth.
6. Do not repeal the Bush tax cuts. Instead, the administration should extend the tax cuts, at the very least for a year to avoid stifling what limited economic growth we now have. At a time when our economy continues to struggle and unemployment is at 9.5 percent, Americans do not want to see an increase in their taxes.
7. Advocate spending cuts. Americans want a government that is leaner and more efficient. By endorsing such cuts, Democrats will blunt the Tea Party’s appeal, which predominately focuses on the need for less government spending.
The Obama administration and the Democratic leadership must support fiscally conservative policies aimed at balancing the budget and reducing the deficit. They must acknowledge that private enterprise creates jobs that stimulate the economy, and we should invest our resources accordingly—more stimulus money in government programs is not the answer.
Unless the administration emphasizes these twin themes of economic growth and holding the line on spending, it will not be able to turn around its economic ratings and ultimately its political standing.
Douglas Schoen is a political strategist and author of the upcoming book Mad as Hell: How the Tea Party Movement is Fundamentally Remaking Our Two-Party System to be published by Harper, an imprint of HarperCollins on September 14.