Obama is desperate. He wants to be re-elected. He doesn’t care how.
He’s becoming so desperate that he is even considering tax cuts for evil corporations.
He’s even going around to them and schmoozing them for cash.
Since previous methods to gin up the economy are off the table, such as more stimulus spending and another round of monetary easing by the Federal Reserve Bank, the administration has nowhere else to go but cutting taxes.
After axing his top economic advisor last week, word from the White House is that Obama is considering a method of stimulus that would have been an anathema two years ago, but has been long favored by conservatives: cutting corporate payroll taxes.
The advantage in cutting employer-side corporate payroll taxes is that it stops penalizing employers for adding workers, while freeing up money that already resides in the payroll line item on a company’s P&L.
In fact conservatives made a strong case for a payroll tax holiday for both employers and employees in 2009 in lieu of stimulus spending controlled by the government.
“I’d have a payroll tax holiday for a year or two that would put taxes in the hands of everybody who has a job, whether they pay income taxes or not,” Senate Minority Leader Mitch McConnell told Fox News in January of 2009 . “And, of course, businesses pay the payroll tax too, so it would be both a business tax cut and individual tax cut immediately.”
But Obama’s political allies on the left quickly shot down the notion:
“A payroll tax holiday does not score well on this front — too little of the benefit goes to lower-income households struggling to make ends meet,” wrote the left-wing Center on Budget and Policy Priorities, playing the rich versus poor game, “and too much goes to higher-income taxpayers, who are likely to save a significant fraction of any new resources they receive.”
Instead, Congress voted for an $800 billion targeted stimulus plan that went into the kind of government programs that put our economy in the hotseat to begin with.
A deal between Obama and congressional Republicans in December included a reduction in taxes that workers have taken out of their paychecks in 2011, but corporations did not get the same break.
The official, who spoke on condition of anonymity, declined to give details about other ideas the administration is considering.
The struggling U.S. economy is the biggest challenge that threatens Obama’s hopes of being re-elected president in 2012.
The president, at a news conference with German Chancellor Angela Merkel earlier this week, said his administration was looking at ways to extend elements of the December deal.
“Some of the steps that we took during the lame duck session — the payroll tax, the extension of unemployment insurance, … the tax breaks for business investment in plants and equipment — all those things have helped,” he said.
“And one of the things that I’m going to be interested in exploring with the members of both parties in Congress is how do we continue some of these policies to make sure that we get this recovery up and running in a robust way.”
The GOP should take the opportunity to press Obama to dismantle the economic agenda that he crafted in the first two years.
But I bet they won’t. No guts, no glory. And they haven’t shown any guts so far.
Mr. Obama, who enraged many financial industry executives a year and a half ago by labeling them “fat cats” and criticizing their bonuses, followed up the meeting with phone calls to those who could not attend.
The event, organized by the Democratic National Committee, kicked off an aggressive push by Mr. Obama to win back the allegiance of one of his most vital sources of campaign cash — in part by trying to convince Wall Street that his policies, far from undercutting the investor class, have helped bring banks and financial markets back to health.
Last month, Mr. Obama’s campaign manager, Jim Messina, traveled to New York for back-to-back meetings with Wall Street donors, ending at the home of Marc Lasry, a prominent hedge fund manager, to court donors close to Mr. Obama’s onetime rival, Hillary Rodham Clinton. And Mr. Obama will return to New York this month to dine with bankers, hedge fund executives and private equity investors at the Upper East Side restaurant Daniel.
“The first goal was to get recognition that the administration has led the economy from an unimaginably difficult place to where we are today,” said Blair W. Effron, an investment banker closely involved in Mr. Obama’s fund-raising efforts. “Now the second goal is to turn that into support.” (NYT)
Gotta raise that $1 Billion dollars so he can buy his re-election.
But another sign of the times, the rats deserting the ship but the Captain says all is well.
Don’t look now, but many on Obama’s economic team is abandoning ship and heading for the exits. Austan Goolsbee’s, who recently resigned from his post as the White House economic advisor after less than a year, is just the most visible defection. Obama’s economic team is headed for the doors and following the lead of the more senior economic advisors. Christine Roemer, Larry Summers and Peter Orszag were the first to abandon Obama’s economic team as it became painfully obvious that their policies on job creation had failed. These are the same advisors that assured Americans that a huge expansion of entitlements, an historic increase in the size of government, almost doubling of the national debt by $5 trillion, while hobbling small businesses with a new thicket of regulations, would actually result in economic expansion and job growth across the nation.
Not only were these presidential advisors wrong, but disastrously so. Rarely has a group failed so spectacularly. Thus, Americans should not be surprised that many of the lower levels of Obama’s National Economic Council team (Sarah Cannon, Eric Lesser, Bryan Jung, Kyle Watkins, Pascal Noel) are also abandoning the sinking Obama ship. This mass exodus of Team Obama’s economic advisors is a stunning vote of no confidence in the President’s economic policies. Obama needs to consider this: When all of your staff give up, they are telling you that there is something flawed in the current approach that doesn’t work. Personnel is policy.
Mr. Obama’s supporters certainly understand that when key staffers depart en masse, they are essentially fleeing a losing endeavor and are hoping to get out before recriminations for failure have a chance to permanently tarnish personal reputations. No one wants to be part of a losing team, and, before the stench of defeat has a chance to permanently cling, they leave.
Curiously, this is the same argument that Obama’s supporters are using to characterize the recent defections from Newt Gingrich. Yet, when it comes to finding a rationale for why the entire Obama economic team has bolted for the doors, the Administration is essentially telling us that “there is nothing to see here…just move along”.
So we hit the iceberg and we’re slowing sinking. The Captain comes over the speaker, “Anyone for another round of golf on the fore deck!”
Then sits down for a dinner with the “fat cats” and tries to get them to support him.
- It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to heaven, we were all going direct the other way – in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.
- Charles Dickens, A Tale of Two Cities
- And these are the times that try men’s souls… 🙂