Sept. 5 (Bloomberg) -- President Barack Obama promised to roll out “new ideas” to boost growth and spur hiring this week as he embarks on economy-focused trips to the Midwest with less than two months until congressional elections.
Armed with what he called “positive news” on the jobs front after the Labor Department reported last week that private payrolls climbed 67,000 in August, more than forecast, the president will travel to Wisconsin and Ohio to promote his economic policies, which Republicans argue are ineffective and have added to record budget deficits.
“I will be addressing a broader package of new ideas next week,” Obama said Sept. 3 at the White House. The economy is moving in “the right direction; we just have to speed it up.”
The hiring by companies eased concerns that the world’s largest economy is sliding back into a recession. The Labor Department report showed overall employment fell 54,000 for a second month and the unemployment rate rose to 9.6 percent from 9.5 percent as more people looked for work.
“We can rule out a double-dip” recession, Christina Romer, who is leaving as Obama’s chief economist, said in a Bloomberg Television interview.
No Quick Fix
Obama said the job numbers are “not nearly good enough” and that the government needs to take further action to keep the economy growing. Still, he said, there’s “no quick fix” to repair all the damage from the worst recession in more than seven decades.
White House economic advisers are considering additional measures, including more tax breaks for small businesses and new spending on infrastructure, according to congressional aides familiar with the discussions who spoke on condition of anonymity because talks are preliminary. Obama also may renew his call for Congress to permanently extend a research-and-development tax credit.
Any new initiatives will be targeted and won’t be on the same scale as the $814 billion stimulus legislation approved last year, administration officials said. “Some big new stimulus plan is not in the offing,” press secretary Robert Gibbs said last week.
One of the challenges for Obama’s economic team is to balance new stimulus measures against their own projections of a budget deficit that will hit a record $1.47 trillion this year and $1.42 trillion in 2011.
Obama’s Economic Message
Obama’s remarks Sept. 3 were a precursor to the economic message he’s set to deliver next week. Obama speaks at a Labor Day rally in Milwaukee on Sept. 6 and plans an economic speech in Cleveland on Sept. 8. He is scheduled to hold a news conference at the White House Sept. 10.
In Cleveland, the president will “discuss some targeted proposals to keep the economy growing including extending tax cuts for the middle class, and investing in the areas of our economy where the potential for job growth is greatest,” Dan Pfeiffer, communications director, wrote in a White House blog.
With the November midterm elections near and the economy still struggling, it may be difficult for Obama make a difference with voters, said Stuart Rothenberg, publisher of the nonpartisan Rothenberg Political Report in Washington.
“Unless and until the public becomes convinced the Obama policy is working -- that the economy is improving measurably and that jobs are being created -- it doesn’t matter how many speeches the president gives promising to fix the economy,” Rothenberg said.
In addition to new measures that would spur hiring, the president last week again urged Congress to pass legislation to help small businesses, including $12 billion in tax breaks and $30 billion worth of aid to free up credit. The House has already passed the bill. Senate Republicans blocked the legislation before lawmakers left for their summer recess.
Obama also is seeking an extension of most of the income tax cuts passed under former President George W. Bush while letting the breaks expire for households making more than $250,000 annually. Republicans want to extend all the tax cuts and some Democrats have indicated they may resist letting the top rates rise.
Extending 2001 and 2003 tax cuts for individuals earning less than $200,000 annually and families earning less than $250,000 -- about 98 percent of all taxpayers -- would cost $2.2 trillion in forgone revenue over the next decade, according to an analysis of government data released Sept. 2 by the Pew Economic Group. Extending all of the tax cuts, including those for the wealthiest Americans, would cost $3.3 trillion over the same period, Pew’s analysis found.
House Republican leader John Boehner said Obama must “change course” with his economic policies, including his plan to let tax cuts for the wealthiest Americans expire. Boehner is among the Republican leaders who have criticized the earlier stimulus, saying it has failed to live up to Obama’s promises while adding to the deficit.
While the administration’s initial projections for the stimulus said it would keep the jobless rate no higher than 8 percent, unemployment has stayed above 9 percent for 16 straight months, Boehner said.
“We need a Congress and a White House that will listen to the American people, who are asking ‘where are the jobs?’” Boehner, of Ohio, said in a statement.
Whatever new measures Obama proposes, he’ll be running up against the calendar as well as election-year politics. The Senate is scheduled to return to Washington Sept. 13 and the House the next day. Lawmakers will be at work for about three weeks before leaving again to campaign.
Pat Griffin, who was chief congressional liaison for the Democratic Clinton administration, said if Republicans decide to do more to boost the economy, they’ll probably wait until after the midterm elections when they’re likely to pick up additional seats, which would give them a stronger hand in negotiations over the shape of any jobs legislation.
“I just don’t think there is going to be much done period until the next Congress,” Griffin said.
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