Libertarians and conservatives blasted President Barack Obama’s populist attack on Congress and wealthy Americans Monday, calling it a blatant attempt at class warfare that is poorly grounded in sound economic theory.
Facing the lowest approval ratings of his presidency, Obama on Monday used his bus tour through the Midwest, which GOP critics have dubbed the “Debt-End Bus Tour,” to blame a wide range of foes for the nation’s economic woes: GOP candidates who don’t want to raise taxes, House Speaker John Boehner for not accepting his ill-defined “grand bargain” on entitlements, wealthy Americans he says don’t pay enough taxes, and members of Congress who engaged in the prolonged debate over raising the debt ceiling.
|Obama in Cannon Falls, Minn. Monday (AP)
Referring to the wrangling over the debt-ceiling, Obama said: “We ended up creating more uncertainty and more damage to an economy that was already weak. Now, we can’t have patience with that kind of behavior anymore.”
He added: “I know you’re frustrated, and I’m frustrated too.”
Speaking in Cannon Falls., Minn., as part his tour across the Midwest, Obama voiced optimism that America has the fortitude to overcome its economic problems — but only if the small-business people who generate most U.S. jobs pay more taxes.
Obama said the nation needs about $4 trillion in spending cuts over the next decade.
“That sounds like a big number,” he told his friendly Minnesota audience. “It is a big number. But you know, if we were able to, as I proposed, cut about $2 trillion in spending; if folks who could best afford it, millionaires and billionaires, were willing to eliminate some of the loopholes that they take advantage of in the tax code, and do a little bit more, and if we were willing to take on some of the long-term costs that we have on healthcare — if we do those things, we could solve this problem tomorrow.”
Conservatives blasted that rhetoric as class warfare, and warned that raising taxes on wealthy Americans, especially during an economic lull, is likely to hurt job creation.
“I think he’s desperate,” CATO budget analyst Tad DeHaven tells Newsmax. “I think he’s playing the class-warfare card. His approval ratings are in the drink, deservedly so. Three years of spending and debt and deficits, and promises that all that would lead to economic growth and job creation, have been an absolute failure.
“So you have 2012 coming up, you’ve got a little over a year to get those approval ratings up, and he’s resorting to the lowest form of political rhetoric. And that’s trying to pit people against each other on the basis of class and income.”
According to the Congressional Budget Office, the wealthiest one-fifth of Americans, who generate most new U.S. jobs, pay 86 percent of the federal income taxes. The bottom two-fifths of Americans pay zero income taxes, according to the Heritage Foundation.
Diana Furchtgott-Roth, the Hudson Institute senior fellow who served as chief of staff for President George W. Bush’s Council of Economic Advisers, tells Newsmax that even if 100 percent of the income of American millionaires and billionaires were funneled into the U.S. Treasury, it still wouldn’t be enough to offset projected U.S. deficits.
“We need a different solution,” she says. “We need more economic growth. We need to be changing entitlements out into the future.”
Furchtgott-Roth also expressed concern that Obama’s continual references to raising taxes during a downturn may be exacerbating the uncertainty business leaders blame for the anemic level of U.S. job creation.
“I don’t know if the president intends class warfare or not. It certainly does come across that way. But I think the more important point to make is that these taxes are on people who create jobs here in the United States.
“They would be hurting lower income people who need jobs… small businesses are the engine of growth for America,” she says.
During his Minnesota speech, President Obama indicated his greatest frustration stems from the behavior of Republicans in Congress.
“I put a deal before Speaker of the House John Boehner that would have solved this problem,” Obama said. “And he walked away, because his belief was we can’t ask anything of millionaires and billionaires and big corporations in order to close this deficit.”
Obama also gave his audience a preview of his agenda to grow jobs, calling on Congress to take several actions he said would stimulate employment. He said Congress should:
• Extend the payroll tax cut in December that added $1,000 to a typical family’s income this year. Economists caution temporary tax cuts have at best a modest stimulus effect on the economy, while making it more difficult to balance the economy.
• Establish an “infrastructure bank” to fund building projects to employ U.S. construction workers and contractors.
• Give tax breaks to companies that employ out-of-work military veterans, to help veterans returning from the Middle East get back to work.
• Pass free trade agreements with South Korea, Colombia, and Panama.
Those free trade deals have not yet been submitted to Congress, however. The administration insists Congress must provide a corresponding benefits package that would aid workers who lose their jobs due to the trade agreements.
House Ways and Means Committee Chairman Dave Camp, R-Mich., said Monday: “I urgently call on the president to send the job-creating trade agreements with Colombia, Panama, and South Korea to Congress without further delay.”
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