Obama Goes Populist on Tax Cuts, Consumer Chief
President Barack Obama is setting up to campaign as a populist defender of the middle class, using the fight over his nominee to run the Consumer Financial Protection Bureau and the extension of a payroll tax cut.
That follows Obama’s travel in recent weeks to battleground states such as Pennsylvania and New Hampshire, where he accused Republicans of hypocrisy for refusing to let Bush-era tax cuts expire while blocking extension and expansion of a payroll tax cut that the president has said would save the typical family more than $1,000 a year next year.
“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 July, Obama nominated Cordray, who was Ohio’s Attorney General from 2009 to 2011. He rose to national prominence when he sued GMAC Mortgage LLC and its corporate parent, Ally Financial Inc., accusing them of using fraudulent affidavits in court cases over foreclosures in the state. He also managed litigation against financial firms including American International Group (AIG) and Bank of America Corp.
Forty-five Senate Republicans have signed a letter sent to Obama in May saying they will oppose any nominee for the consumer agency in part, they said, because the bureau should be run by a board instead of a single director.
The position was created under the Dodd-Frank Act regulating the financial industry. The 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.
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 re-election bid.
“He is advancing the Democratic message that we’re for the middle class and Republicans are for the rich,” said Begala, who was a political aide to former president Bill Clinton.
The theme has been taking shape since Obama unveiled in September a plan to spur hiring that made the payroll tax-cut its centerpiece and called for higher taxes on millionaires to pay for the cost.
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?”
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 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 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.
Even as 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, the administration argued more needs to be done to spur faster growth.
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. Romney, campaigning for the Republican presidential nomination, argues that his background in business gives him the experience to improve the economy.
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 Theodore 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.
Zelizer said any campaign theme will be trumped by economic data.
“Obama’s best hope is not a message, it’s unemployment continuing to drop,” Zelizer said.
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