The economy and Obama's 'grumpy voter' problem
As the US economy recovers at a snail's pace, President Obama is urging Congress to act on his 'to-do' list for creating more jobs. Republicans focus on the dangers of tax increases when tax cuts expire in January. Come November, who will voters believe?
As the presidential campaign calendar moves inexorably toward the November election, the economy increasingly becomes a political problem for President Obama.
The recovery creeps along and may be stalled. And the further into Obama’s first term the nation gets, the more Americans are likely to fault him rather than the Republican – George W. Bush – under whom current economic difficulties began.
The strategies for Obama and Republicans couldn’t be more different.
Obama: Yes, things are tough and the recovery is too slow. Plus, there are factors beyond any president’s control, namely economic turmoil in Europe and international oil prices. And besides, you guys are dragging your heels on my ideas to boost employment, like infrastructure repair.
Republicans: “Obama’s failed policies have made high unemployment and a weak economy the sad new normal for families and small businesses,” as House Speaker John Boehner put it Friday when May’s dismal employment figures came out.
As grim as those jobs figures were – just 69,000 jobs created and an unemployment rate that ticked up to 8.2 percent – that may not have been the worse news for Obama.
“Even more troubling than the unemployment rate for Obama could be this week’s revision in the growth rate of the gross domestic product for the first quarter from 2.2 percent to 1.9 percent,” the Boston Globe reported. “A president seeking reelection has historically needed to head into the fall with a GDP growth rate over 3 percent to have a good chance at victory, according to Professor Larry Sabato of the University of Virginia.”
“This is Obama’s worst day yet in the 2012 campaign,’’ Sabato told the Globe.
Obama has a to-do list for Congress, especially the Republic-led House: “Reward American jobs, not outsourcing … Expand refinancing for responsible homeowners … Invest in tax credits for small-business jobs … Invest in clean-energy manufacturing … Create a veterans jobs corps.”
"My message to Congress is get to work," Obama said in his weekly radio address Saturday.
“I sent Congress a jobs bill last September full of the kinds of bipartisan ideas that would have put our fellow Americans back to work and helped reinforce our economy against those outside shocks,” Obama said. “Since then, Congress has only passed a few parts of that jobs bill, like a tax cut that’s allowing working Americans to keep more of your paycheck every week.”
“Right now, Congress should pass a bill to help states prevent more layoffs, so we can put thousands of teachers and firefighters and police officers back on the job,” Obama continued. “Congress should have passed a bill a long time ago to put thousands of construction workers back on the job rebuilding our roads and our bridges and our runways. Instead of just talking a good game about job creators, Congress should give small business owners a tax break for hiring more workers and paying them higher wages. Let’s get that done.”
Speaking for Republicans Saturday, Sen. John Cornyn of Texas warned of a “Taxmageddon” unless current tax rates are extended. That includes the so-called Bush tax cuts for wealthy Americans as well as the payroll tax cut that Obama and Congress agreed to earlier this year.
“Unless Congress and the President act, January will bring us the largest tax increase in American history – a tax increase of roughly $500 billion,” Sen. Cornyn said. “Make no mistake: every single working American will see his or her taxes go up on January 1st absent action. Family budgets will be squeezed even tighter. Disposable income will shrink. And many jobs will be destroyed.”
“This would be a body blow for our economy and it could easily push us back into a recession,” Cornyn warned. “Everyone knows that, including the President, who seems to prefer campaigning to governing, demonstrating a disappointing unwillingness to lead.”
The preferred remedy for the GOP? Electing a new president in November.
At the moment, Obama and presumptive GOP nominee Mitt Romney are neck-and-neck in the polls. If there’s any good-news glimmer for Obama, it’s that some key battleground states (like Ohio, Colorado, and Virginia) are doing better than the nation as a whole.
“Most of the swing states by the third quarter of this year will have a lower unemployment rate than the national average,” Xu Cheng, a senior economist at Moody’s Analytics, told Politico.com. “And most of the battlegrounds will be below 8 percent unemployment, which will negate the ‘grumpy voter effect.’”
Still, there are critical first Fridays – the day each month when employment figures come out – between now, the party conventions, and the election.
The question for Obama is, will they create more grumpy voters wanting to end his presidency?