July 6, 2012
After the release on Friday of another round of dreary Labor Department unemployment figures, President Obama is fast running out of time and excuses for an economy that is dangerously losing altitude again. He’ll have just four more chances, of course, for the picture to improve before November.
The past week was largely dominated by political sparring over the meaning of the Supreme Court’s ruling last Thursday that upheld the constitutionality of Obama’s health care reform law. Republicans vowed to turn the decision into a political rallying cry against Obama and the Democrats this fall and then to repeal the Affordable Care Act next year. But Romney, the presumptive GOP presidential nominee, and his top advisers so mishandled the health care issue this week that some prominent conservatives warned their campaign was squandering a chance to beat Obama.
Just in the nick of time for the GOP, the new Labor Department jobless numbers shifted the political conversation back to the economy – far more treacherous political terrain for the president than for Romney.
In June employers added just 80,000 jobs and the nation’s unemployment rate remained at 8.2 percent, according to the government report. The employment picture looked even worse just below the surface: The unemployment rate was 14.4 percent among blacks, 11 percent among Hispanics, and nearly 24 percent among teenagers and young people – all important blocs of voters for the president for a second term.
Mark Zandi, the usually upbeat chief economist of Moody’s Analytics, told MSNBC that he was surprised and disappointed by the latest grim jobless numbers. “We’re growing, but we’re not going fast enough to make anyone feel good about what’s going on,” he said. The Labor Dept. report added to growing concern that the economic recovery, which seemed to be gaining momentum in the early part of the year, is faltering after getting off to a strong start for the third consecutive year. The stock markets swooned in light of the report and analysts almost universally agreed that this was bad economic and political news for Obama.
Speaking to a group of supporters in Poland, Ohio, the president made only a passing reference to the unemployment report. He acknowledged, “It’s still tough out there,” but urged voters to take the long view of the economic recovery.
“We learned this morning that our businesses created 84,000 new jobs last month, and that overall means that businesses created 4.4 million new jobs over the past 28 months, including 500,000 new manufacturing jobs,” the president said. “But we can’t be satisfied because our goal was never to just keep on working to get back to where we were back in 2007. I want to get back to a time when middle-class families and those working to get into the middle class have some basic security. That’s our goal. But we’ve got to grow the economy faster and we’ve got to put even more people back to work.”
Mitt Romney called the latest unemployment numbers a “kick in the gut” that “has got to end.” He argued that even with giving Obama the benefit of the doubt by taking the long view of things, the president’s stimulus and tax policies have been a failure for millions of Americans still struggling to find work.
“There’s a lot of misery in America today, and these numbers understate what people are feeling and the amount of pain that is occurring in middle-class America,” Romney told reporters.
CHALLENGING POLITICAL WEEK
Even while vacationing with his family in New Hampshire, the former Massachusetts governor has had a miserable political week. His campaign’s seriously mishandling of the health care reform controversy and other issues drew withering criticism from prominent conservatives, including media mogul Rupert Murdoch.
Romney’s problem is that he and most other Republican leaders have relentlessly attacked Obama’s Affordable Care Act as a costly job-killing measure that needs to be repealed, though it was largely modeled after health care reform that Romney himself pushed through in Massachusetts during his time as governor.
Things got dicey for him last week when the Supreme Court upheld the heart of the federal law by saying that the mandate requiring Americans to buy insurance if they don’t already have it or to pay a penalty was in fact a form of taxation allowable under the Constitution.
Early this week, Romney’s senior adviser, Eric Fehrnstrom, told MSNBC that the campaign believed the individual mandate was a penalty, not a tax, presumably to protect Romney from the charge that his mandate in Massachusetts was also a tax. Fernstrom’s comments caused a firestorm of protests from conservative Republicans who believed he was undercutting their argument that Obama had engineered one of the biggest tax increases in history by passing the Affordable Care Act. Romney then gave an interview to CBS News on Wednesday essentially retracting Fehrnstrom’s statement and asserting that the mandate was indeed a tax.
The New Healthcare Tax That the IRS Won't Enforce
On Friday morning, Romney looked far more at ease as he addressed the unemployment numbers and delivered a stinging attack on Obama’s economic, energy and regulatory policies. “Remember the president at the beginning of his term predicted that if he were able to put in place his stimulus and his other policies, that he would… keep unemployment below 8 percent,” Romney said during an appearance at a hardware store in Wolfboro, N.H. “Forty-one months above 8 percent pretty much defines lack of success. It has been a failed series of policies. Their prediction was that unemployment would be at 5.6 percent now. Instead it is at 8.2 percent.”
Romney outlined his own proposals for getting the economy back on track, including balancing the federal budget in 8 to 10 years, opening up more federal land and waters to oil and gas drilling, cutting red tape, slashing corporate and individual tax rates, encouraging expanded trade with Latin America, and cracking down on unfair trade practices by China. “Not just at the edges, but finally going after [China] aggressively and saying, ‘Look, guys, you just can’t keep stealing our jobs,’” he said.
RUST BELT TRIP
The unemployment numbers were released as Obama was wrapping up a campaign bus tour through key battleground states in the industrial Rust Belt, where he’s being helped by better than average unemployment figures in Ohio and Pennsylvania, both of which recorded a rate of 7.3 percent in May. But Obama will have to fight hard to hold onto Democratic Party members and swing voters in Ohio, Pennsylvania and Michigan this fall, amid continued unease among voters about the pace of the recovery.
With unemployment stuck at 8.2 percent nationally, a relatively lethargic manufacturing picture and fears that a year-end fiscal cliff of automatic federal tax increases and government spending cuts could further impair growth, Obama is counseling voter patience while warning that Romney would do little more than line the pockets of the rich with more tax cuts.
The Federal Reserve Board has practically exhausted every means at its disposal to try to rev up the economy. And there is little more Obama and lawmakers can do before the election to bolster theeconomy because gridlock in Washington between the Democrats and Republicans that is blocking action on anything but the most essential measures. “What's holding us back right now is not that we don't have good answers for how we could grow the economy faster or put more people back to work,” Obama said on Friday. “The problem is we've got a stalemate in Washington.”