The Fail Bus

Obama Democrats struggle in response to bad economic news

• July 9, 2012 5:00 am


President Obama took a break from the Hollywood fundraising circuit last week to tout his economic record in front of ordinary voters.

However, his two-day "Betting on America" bus tour through Ohio and Pennsylvania coincided with the release of another disappointing jobs report, the latest troubling news about the economy.

The economy added just 80,000 jobs in June, the Bureau of Labor Statistics (BLS) reported on Friday, well short of the 130,000 to 150,000 new jobs needed just to keep up with population growth. Unemployment remained at 8.2 percent, far greater than the 6 percent level Obama’s economic advisers predicted at this point in his term.

It was the second disappointing report in as many months. The BLS report for May showed the economy added just 69,000 jobs, falling well short of estimates.

Over the weekend, top Obama surrogates struggled to find a coherent message in light of the bad news. "We are not growing fast enough and we’re not adding enough jobs," said former White House press secretary Robert Gibbs.

However, Democratic National Committee chair Debbie Wasserman Schultz (D., Fla.) was far more optimistic, saying she was "pretty happy" about the latest jobs numbers.

The president hailed the June jobs data as "a step in the right direction." Republicans slammed Obama’s choice of words, saying it recalled his recent assertion that "the private sector is doing fine," despite myriad indications to the contrary.

The president told supporters in Pittsburgh that under his leadership, "we've started to see manufacturing come back to our shores."

However, just last week, the Institute for Supply Management’s reported that U.S. manufacturing activity contracted for the first time in three years.

Jim Pethokoukis of the American Enterprise Institute has noted that there are signs the U.S. economy is entering another recession. The economy remains sluggish, growing just 1.9 percent in the first quarter of 2012. Prominent Democrats such as Rep. Henry Waxman (D., Calif.) have suggested the country is in a depression.

Obama has been reluctant to tout his signature economic initiative—the $787 billion stimulus package passed in 2009—and voters are skeptical that his $447 billion "jobs plan"—the American Jobs Act of 2011—would have a significant effect on economic growth.

Independent voters, meanwhile, remain wary of the president’s argument that deficit-financed government spending is essential for job growth. The failures of taxpayer-financed green energy firms such as Solyndra and Abound Solar have fueled such concerns.

The president, however, has shown little reluctance when it comes to advocating for more of the same policies.

"We got to bet on a clean energy industry of solar and wind that can create jobs and help our environment, and free ourselves from dependence on foreign oil," he told the crowd in Pittsburgh.

The Obama campaign has also launched a series of misleading attacks on Republican challenger Mitt Romney over the issue of outsourcing—a strategy that could be undermined by the fact that the Obama administration has awarded billions of dollars in green energy loans to foreign-owned companies and firms that make their products overseas.

Republicans counter that the president remains vulnerable when it comes to the national debt and deficit, issues that helped propel Congressional Republicans to historic victories in 2010.

Despite repeatedly promising to cut the deficit in half by the end of his first term, Obama has barely made a dent. He has accumulated more debt—$6.2 trillion and counting—than any president in American history, despite labeling George W. Bush "unpatriotic" for adding $4 trillion to the national debt.

While Obama continues to talk about the need to reduce the debt and deficit, he often does so in the context of attacking Republican proposals, which he says would "balance the budget on the backs of middle-class families."

That is usually followed by a call for wealthy individuals and businesses to "pay their fair share" in taxes.

Obama also claims credit for the roughly $2 trillion in spending cuts he signed into law in 2011 as part of the deal to raise the debt ceiling, despite initially advocating for no cuts whatsoever.

The president’s inclination toward genuine fiscal restraint has been hard to detect. The deficit-reduction plan Obama unveiled last year was little more than $1.6 trillion tax increase, budget analysts estimated.

His controversial health care law, which was recently upheld by the Supreme Court, has the potential to increase the debt even more.

Douglas Holtz-Eakin, a former director of the nonpartisan Congressional Budget Office (CBO), estimated that once the CBO recalculates the cost of the bill to incorporate the tweaks included in the court’s decision, the law’s total price tag could increase by $500 billion over the next decade.

And while the president has readily proposed new spending measures, he has yet to formally embrace a plan to reduce the long-term deficit by reforming federal entitlement programs. Treasury Secretary Timothy Geithner has admitted that the president’s most recent budget—unanimously rejected by both houses of Congress—would leave the country with "unsustainable" commitments.

The CBO projected that Obama’s budget would add an additional $6.4 trillion to the national debt by 2022, and would have a negative impact on long-term economic growth.

Given the poor state of the economy, Obama is hoping to frame the 2012 election not as a referendum on his performance, but as a choice between his policies and those of Republican challenger Mitt Romney and his "allies in Congress."

"Their basic vision is one that says we’re going to give $5 trillion of new tax cuts on top of the Bush tax cuts, most of them going to the wealthiest Americans—they won’t be paid for, or if they are paid for, they’ll be paid for by slashing education funding," Obama said at a recent campaign event.

To make the choice as stark as possible, the pro-Obama Super PAC Priorities USA has unleashed a series of negative attacks against Romney.

The ad campaign marks a tremendous turnabout for a president who not only pledged to eschew "shadowy" Super PACs, but who once claimed that his election would prove "it's possible to overcome the politics of division and distraction; that it's possible to overcome the same old negative attacks that are always about scoring points and never about solving our problems."