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Saturday, September 23, 2023

Obama tries to reverse falling Democratic fortunes

President Obama: Looking for a political miracle (AFP)

President Barack Obama will travel to the Midwestern state of Wisconsin Monday as part of a broad effort to stem ebbing political support over the slowing economic recovery.

The president will deliver remarks on the economy at the Milwaukee Laborfest, a labor union gathering, one of many held around the country as America celebrates Labor Day.

On Saturday, Obama vowed to expand a prosperous middle class and help his compatriots achieve the American Dream.

“This Labor Day, we should recommit ourselves to our time-honored values and to this fundamental truth: to heal our economy, we need more than a healthy stock market; we need bustling main streets and a growing, thriving middle class,” he said in his weekly radio address.

“That’s why I will keep working day-by-day to restore opportunity, economic security, and that basic American Dream for our families and future generations,” Obama added.

The comments came after a new Labor Department report released Friday showed the economy lost 54,000 jobs last month and the unemployment rate edged up to 9.6 percent.

Although the job losses were much less than the 120,000 slump expected by Wall Street economists, hiring was not substantial enough to help millions of crisis-hit Americans to return to work.

Obama’s economic team is considering a raft of new measures to inject impetus into the economy, which one report said could include tax breaks for businesses that could potentially reach hundreds of billions of dollars.

But with little appetite in Washington for a massive new round of government stimulus spending, with congressional elections looming in November, the White House said there would be no repeat of massive 814-billion-dollar 2009 Recovery Act.

Obama will visit two states, Wisconsin and Ohio this week, which have both been hit hard by the recession, and include crucial political races as Democrats battle to cling onto their majorities in Congress.

On Friday, September 10, Obama will hold his first White House news conference since late May, as fears mount that the slowing recovery augurs a period of prolonged economic stagnation.

The Washington Post reported that the administration was considering new tax breaks for businesses potentially worth hundreds of billions of dollars.

A temporary payroll tax holiday could allow businesses to keep 300 billion dollars they would have otherwise handed to the government.

A permanent extension of the research and development tax credit could cost 100 billion dollars over the next 10 years, the Post said.

Officials however responded that no firm decisions had yet been taken, but that Obama was pressing his team for new ideas.

“There have been a lot of reports and rumors on different options being considered — many of which are incorrect,” said Amy Brundage, a White House spokeswoman.

“The options under consideration build on measures the President has previously proposed, and we are not considering a second stimulus package.”

Republicans brand the stimulus plan a huge waste of taxpayer money that has failed to meet the administration’s rosy jobs and growth projections.

Obama, however, argues that he inherited an economy in deeper trouble than anyone thought in 2009, and that the bill did nothing less than stave off a second Great Depression.

Four straight quarters of economic growth mean the economy, though still wounded, is convalescing, he says.

However, the government last month slashed second-quarter growth figures to 1.6 percent from 3.7 percent in the first quarter, stoking fears of sluggish future expansion and even a double dip recession.

Copyright © 2010 AFP

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