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Morning Bell: Holding Economic Recovery Hostage

Posted By Conn Carroll On September 13, 2010 @ 9:15 am In Economics | Comments Disabled

Last August, NBC News’ Chuck Todd posed a question [1] to President Barack Obama from Elkhart, Indiana, resident Scott Ferguson: “Explain how raising taxes on anyone during a deep recession is going to help with the economy.” The President responded: “We have not proposed a tax hike for the wealthy that would take effect during a recession. … He’s absolutely right, the last thing you want to do is raise taxes in the middle of a recession because that would just suck up, take more demand out of the economy and put businesses in a further hole.”

Fast forward to yesterday on NBC’s Meet the Press [2] where — after host David Gregory asked, “When does the economic team think that Obama administration economic policies will have a sizable impact on the unemployment rate in this country?” — White House senior adviser David Axelrod admitted: “It took 10 years to create that problem … It’s going to take — nearly 10 years — it’s going to take some time … It’s going to take some time to fix it.” Meanwhile over at Fox News Sunday [3], newly minted Chairman of the President’s Council of Economic Advisers Austan Goolsbee was admitting to host Chris Wallace: “I think it’s clear that the labor market is significantly weakened, has been for some time. We have to do everything we can to try to create jobs and get people back to work. … I don’t think the unemployment rate will be coming down significantly anytime in the near future.”

So if the labor market has “significantly weakened” as Goolsbee admits, and “it’s going to take nearly 10 years” before Obama’s policies “will have a sizable impact on the unemployment rate,” then why are the White House and the leftist majorities in the House and Senate pushing for massive tax hikes on those Americans and small businesses that make more than $200,000 a year? Politics.

The White House is determined, and has been determined from day one, on soaking the most productive and entrepreneurial Americans to pay for their massively expanded social welfare state. Just look at the President’s statement that he would not propose raising taxes on the wealthy “during a recession.” The White House plan all along was for President Obama’s economic stimulus to pull us out of recession so that the U.S. economy would support 137.8 million jobs by December 2010 [4]. The whole point of Vice President Joe Biden’s “Recovery Summer” was to signal the end of the recession and mark a transition to an economic recovery that would give the President the rhetorical room to raise taxes.

But there’s just one little problem. The President’s trillion dollar Keynesian economic stimulus has completely failed to revive job creation and with only 130.3 million Americans currently employed, President Obama’s Jobs Gap stands at 7.5 million. Instead of taking responsibility for his failed economic policies and changing course, the President is again shifting blame to Republicans and stubbornly plowing ahead with his promise to raise taxes. So this past Friday, after an Associated Press reporter asked if the November elections would be a referendum on his handling of the economy, President Barack Obama [5]accused [5] Republicans of “holding middle-class tax relief hostage.”

This is just plain false. The Republicans do not have the power, yet, to hold anything hostage. It is the left that controls the White House, the Senate and the House. And it’s the Democrats in both the House and Senate who are listening to the sound economic reasoning of the Scott Fergusons of America. In the Senate, at least four Democrats – Sens. Evan Bayh (IN), Kent Conrad (ND), Ben Nelson (NE) and Jim Webb (VA) — as well as Joe Lieberman (I-CT), have expressed concern that any tax increases would hinder economic growth [6]. And in the House, Reps. Jim Matheson (D-UT), Glenn Nye (D-VA), Melissa Bean (D-IL) and Gary Peters (D-MI) are drafting a letter begging Speaker Nancy Pelosi not to raise taxes [7] because “in times of economic recovery it makes good sense to maintain things as they are in the short term, to provide families and businesses the certainty required to plan and make sound budget decisions.”

Raising taxes on work and investment would mean less work and less investment and can be regarded only as an overtly hostile anti-jobs policy [8]. Raising taxes was a bad policy in August 2009 and with unemployment hovering around 10% it is bad policy now.

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Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2010/09/13/morning-bell-holding-economic-recovery-hostage/

URLs in this post:

[1] posed a question: http://www.swamppolitics.com/news/politics/blog/2009/08/obama_no_new_taxes_in_a_recess.html

[2] NBC’s Meet the Press: http://www.msnbc.msn.com/id/39114416/ns/meet_the_press-transcripts/39131595

[3] Fox News Sunday: http://www.foxnews.com/on-air/fox-news-sunday/transcript/austan-goolsbee-talks-economy-and-elections

[4] so that the U.S. economy would support 137.8 million jobs by December 2010: http://www.foundry.org/2010/09/03/obama-jobs-deficit-forcing-obama-to-scramble/

[5] President Barack Obama : http://www.whitehouse.gov/the-press-office/2010/09/10/press-conference-president-obama

[6] have expressed concern that any tax increases would hinder economic growth: http://www.nytimes.com/2010/09/13/us/politics/13cong.html?pagewanted=2&_r=1&ref=todayspaper

[7] begging Speaker Nancy Pelosi not to raise taxes: http://www.politico.com/news/stories/0910/42042.html

[8] Raising taxes on work and investment would mean less work and less investment and can be regarded only as an overtly hostile anti-jobs policy: http://www.heritage.org/Research/Reports/2010/09/Obama-Tax-Hikes-Defended-by-Myths-and-Straw-Man-Arguments-Summary

[9] a record increase on President Barack Obama’s watch: http://news.yahoo.com/s/ap/20100911/ap_on_bi_ge/us_poverty_in_america

[10] The New York Times: http://www.nytimes.com/2010/09/13/us/politics/13ads.html?ref=todayspaper

[11] withhold funding for Obamacare: http://www.politico.com/news/stories/0910/42015.html

[12] Democrats are joining Republicans in pushing for the repeal of an Obamacare tax provision: http://www.nytimes.com/2010/09/12/health/policy/12health.html?partner=rss&emc=rss

[13] law suit by states and the National Federation of Independent Businesses against Obamacare: http://www.latimes.com/health/la-na--health-suit-20100913,0,5166811.story

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