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LAMBRO: Another White House whiff
Driving U.S. economy is not within Obama’s power
Question of the Day
President Obama’s latest swing of the bat to get the economy growing again looked a lot like his previous attempts when he couldn’t come through with a base hit.
He has had nearly three years to score in an economy that remains in a recession but has struck out repeatedly, losing voter confidence and raising doubts about his chances for re-election in 2012.
Even the liberal New York Times called his nearly $500 billion jobs plan a “mix … of extensions and expansions of existing policies,” with a few new ideas thrown in to hoodwink voters into hoping that this one could be a home run. Don’t hold your breath.
“The plan - for the most part - is a conventional stimulus, much like the one passed at the beginning of the president’s term,” The Washington Post says.
If all the previous infrastructure spending and temporary business payroll tax cuts didn’t work, why would more of the same yield a different result - especially when his latest scheme costs about half of what was spent on the 2009 stimulus?
If you’re keeping count of what Obama’s economic stimulus experiments cost, the number is somewhere near $1.5 trillion, all of it adding to the debt and very little of it producing the jobs he said it would. In fact, the economy has gotten much worse, with zero net new jobs created in August, and the economy barely growing at 0.8 percent this year.
The plan he proposed last week before a joint session of Congress failed to excite Wall Street or the stock market, which has been in a nosedive; failed to move his job approval scores, which are running at about 40 percent; and failed to boost the country’s depleted confidence in his presidency.
Nearly three-fourths of Americans now say the nation’s economic outlook is “getting worse,” according to the Gallup Poll.
In his over-inflated rhetoric, Mr. Obama made the plan sound like the Second Coming. But nothing in his plan - even if it were to become law - would have much of an effect this year or next.
His $140 billion in infrastructure spending would take a long time to get into the contract pipeline, with no permanent impact on job creation.
Republicans like parts of his $245 billion in payroll tax cuts, which would extend this year’s employee tax cut for another year, lowering it to 3.1 percent in 2012 and cutting the 6.2 payroll tax that companies pay to 3.1 percent. Still, the tax cuts would rise to their former rate at the end of next year, hitting workers and business at a time when the economy may still be sluggish.
But there’s little if any GOP support for Obama’s micromanaging plan to offer a payroll tax holiday for businesses that hire more workers or give their existing employees raises, or give tax credits of up to $4,000 to employers who hire people who have been out of work for more than six months. Jobless for five months? Sorry, pal.
In a survey by the New York Times, many firms said their hiring depends on their sales, not on tax credits. “Business demand is what drives hiring,” said the owner of Nutsonline, an e-commerce company in Cranford, N.J., that sells nuts and dried fruits. Others said that, all too often, the tax credits go to businesses that were planning to hire anyway.
An official of Chesapeake Energy, a major explorer of oil and gas, said the Obama tax credit “does not drive our hiring.” Roger Tung, chief executive of Concert Pharmaceuticals in Lexington, Mass., said the credit wouldn’t cover the costs of hiring one additional employee after benefits were figured in. Hiring would pick up only when investor confidence grew so his firm could raise more capital, Mr. Tung said.
But capital is not in Mr. Obama’s vocabulary. Republicans who favor permanent income tax cuts for businesses, individuals and investors say that Mr. Obama’s economic policies have failed in part because they are temporary and lack capital investment incentives that affect every level of the economy and every business, large and small.
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