President Barack Obama is using a battle over the stalled nomination of his candidate to run the Consumer Financial Protection Bureau and extension of a payroll tax cut to campaign as a populist defender of the middle class.
“From nominations to economic proposals, the point right now is for the administration to show that they’re looking for economic solutions and that Republicans are looking to obstruct them,” said Julian Zelizer, a professor of history and public affairs at Princeton University in New Jersey.
In recent weeks, Obama has traveled to battleground states such as Pennsylvania and New Hampshire accusing Republicans of hypocrisy for refusing to let Bush-era tax cuts expire while blocking extension and expansion of the payroll tax cut, which the president has said saves the typical family $1,000 a year.
On a Nov. 30 trip to Scranton, Pennsylvania, Obama said Republicans face a choice: “Are you going to cut taxes for the middle class and those who are trying to get into the middle class, or are you going to protect massive tax breaks for millionaires and billionaires?”
Less than a year before Election Day 2012, with his approval rating at 44 percent in a Dec. 1-3 Gallup Poll, Obama is making a “very important and fundamental strategic shift from 2010” when Republicans won by framing the election in terms of spending and deficit reduction, said Paul Begala, a Democratic strategist who is advising an independent campaign group raising money for the president’s reelection bid.
“He is advancing the Democratic message that we’re for the middle class and Republicans are for the rich,” said Begala, former president Bill Clinton’s onetime political aide.
The populist theme in the president’s re-election argument has been taking shape since Obama unveiled a job-creating plan in September that made the payroll tax-cut its centerpiece and called for higher taxes on millionaires to pay for the cost.
The White House is hoping that Richard Cordray’s nomination as chief of the consumer protection bureau plays into that theme. White House spokesman Josh Earnest said during a conference call with reporters today that the administration will begin “aggressively” campaigning for Cordray’s confirmation ahead of a likely Dec. 8 Senate vote.
Earnest said the White House will ratchet up pressure on lawmakers from Alaska, Indiana, Iowa, Maine, Nevada, Tennessee and Utah. The president is slated to give television interviews to local news anchors from the seven states on Dec. 8, and administration officials will brief Washington-based reporters from the states on Dec. 5. Dozens of state attorneys general, mayors and other elected officials will push for Corday’s nomination. Administration officials also will appear on television stations in the major markets in the states.
Earnest said the goal is to drive home “the tangible consequences for families in those states if the senator who is elected to represent them in Washington, D.C., sides with the financial industry and votes to block his nomination.”
Senate Majority Leader Harry Reid of Nevada has said he plans to hold a vote on Cordray’s nomination this week. Cordray, a former Ohio attorney general who is serving as the consumer bureau’s enforcement director, has drawn widespread Republican opposition.
Republican strategist John Feehery said he thinks voters will view Obama’s message as pure politics. “He’s trying to put on his populist hat going into this campaign, and I’m not sure if people really believe that Obama’s fighting for them or just fighting for his re-election,” Feehery said.
Feehery said the administration’s “goal is to be as anti- business as they can be, but the problem for Obama is that business is the one that actually creates jobs in this country and being anti-business means being anti-jobs.”
Obama trailed former Massachusetts Governor Mitt Romney among likely general election voters in New Hampshire by 10 percentage points amid voter discontent with the president’s job performance and the economy in a Bloomberg News poll Nov. 10-11. Obama carried New Hampshire by 54-45 percent in 2008.
On Dec. 6 Obama will travel to Osawatomie, Kansas, where he will argue that this is “a make-or-break moment for the middle class and all those working to join it,” according to a White House statement. President Teddy Roosevelt, a Republican, visited Osawatomie calling for a “new nationalism” more than 100 years ago. Obama is seeking to capitalize on a connection with Roosevelt, who said then: “I stand for the square deal.”
Kansas’s economy ranked 38th among U.S. states in the year through June 30, according to the Bloomberg Economic Evaluation of States Index, which uses data on employment, real estate, taxes and local stocks to track the direction of state economies. The state’s personal income increased by 6.8 percent over the year, according to the study. Employment declined 0.8 percent, and home prices fell 2.5 percent, the study shows.
“This is part of the narrative which is portraying Republicans as defenders of privilege and plutocrats and Democrats basically looking out for ordinary Americans consumers, middle class people,” said Ross Baker, a political scientist at Rutgers University in New Brunswick, New Jersey.
The president promoted the Dodd-Frank legislation passed last year creating the financial protection agency, which Deputy Director of the National Economic Council Brain Deese said is “hamstrung” by not having a director in place.
“It cannot supervise and exercise its full authorities over these non-bank financial institutions which affect the lives and financial security of tens of millions of American families,” he said on the conference call with reporters.
“Every day that we go without having a director in place and without having an agency that’s able to exercise its full authorities is another day that those tens of millions of American families remain at risk,” Deese said.
An administration report argues that tens of millions of Americans rely on non-bank institutions not supervised by a federal regulators such as payday lenders, mortgage lenders and credit reporting agencies. They play an “incredibly important part in the lives of American families” and lack of supervision “creates an unlevel playing field” in the financial system, Deese said.
The report points to studies showing that payday lenders on average charge fees of approximately $16 for a $100 two-week loan.
Republican opposition to Cordray, if it holds, would be enough to block his nomination, because it takes 60 votes in the 100-member Senate to end debate and advance a nomination.
“I think Obama’s best hope is not a message, it’s unemployment continuing to drop,” Zelizer said.
The Labor Department said Dec. 2 that the nation’s jobless rate fell to 8.6 percent in November from 9 percent the month before after employers added 120,000 jobs and 315,000 Americans left the labor force. The unemployment rate was the lowest since March 2009.
Obama has been pushing Congress to extend and expand the payroll tax cut, which lowered the employee portion of the Social Security payroll tax from 6.2 percent to 4.2 percent for 2011. The tax cut is set to expire Dec. 31.
At a Dec. 2 event with former President Bill Clinton promoting energy-efficient upgrades for buildings, Obama said Congress must extend the payroll tax cut and renew unemployment insurance.
“Failure to take either of these steps would be a significant blow to our economy,” he said as Clinton looked on.
“It would take money out of the pocket of Americans who are most likely to spend it, and it would harm small businesses that depend on the spending. It would be a bad idea.”
This year’s tax break cost the government $111.7 billion in forgone revenue, according to the congressional Joint Committee on Taxation. The U.S. transferred money from the general fund to cover the reduced funding for Social Security.
Paying for Tax-Cut
On Dec. 1, the Democrat-controlled Senate rejected a Democratic proposal that would have imposed a 3.25 percent surtax on annual income exceeding $1 million to pay for extending the payroll tax cut and expanding it to employers.
The Senate also rejected a separate Republican measure that would have extended the payroll tax cut for employees for one year and offset the cost by reducing the federal work force by 10 percent, freezing federal pay through 2015 and requiring high earners to pay more for Medicare premiums.
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