A pair of top House Democrats and a labor leader got on the phone with reporters on Tuesday afternoon to talk up their efforts to boost the economy. Conspicuously absent: discussion of President Obama's newly unveiled plans for business tax breaks and infrastructure investment.
On the conference call, House Majority Leader Steny Hoyer, D-Md., outlined a September agenda for Congress that included a small-business lending bill now before the Senate, action on expiring tax cuts enacted under President George W. Bush and measures to keep the government running past Oct. 1, the start of the new fiscal year. In mentioning Obama's push for new infrastructure funding and expansion of business tax writeoffs for new investment and research, Hoyer said only it would "be very difficult to get a broad agenda through."
Even AFL-CIO head Richard Trumka, who attended Obama's announcement yesterday in Milwaukee, barely mentioned the ideas on the call. It's not much support for plans that the president wants to use to improve either the economy or his party's chances in the November elections.
Tomorrow, Obama is expected to unveil his plan to allow businesses to quickly write off all the costs of new investments. That would provide an incentive to spend and free up money for hiring faster. Though it would offer about $200 billion in tax breaks, the long-term cost would total only about $30 billion because businesses are already expected to write off much of the costs, just at a slower pace.
Obama has already previewed his plan for $50 billion in new infrastructure spending, including a new infrastructure bank. And he endorsed making permanent a tax credit for research and development.
But on Tuesday, White House press secretary Robert Gibbs downplayed the potential for immediate impact, saying the proposals are focused on long-term growth and acknowledging that they won't create jobs until 2011. "If [Congress doesn't act] prior to the election, the president and the economic team still believe that these represent some very important ideas in continuing along our path toward economic recovery," Gibbs said.
Gibbs also strained to avoid the s-word to describe the hundreds of billions of dollars of plans, preferring the phrase "continue our economy recovery" instead of "stimulate." Asked directly whether it constitutes a stimulus, Gibbs said: "It's not."
From a policy perspective, Democrats face a Catch-22. There's no shortage of ideas. But things that can pass Congress won't work quickly. Things that can work quickly can't pass. Some Republicans may be tempted to support Obama's pro-business ideas. But proposing more spending, no matter what you call it, opens Democrats to further Republican attacks for wasteful government spending.
This rhetorical battle may end up being for the benefit of voters, not the unemployed.
Regardless, not all of Obama's proposals will sit well with Congress. Their costs must be offset with cuts elsewhere in the budget, and Republicans and some business groups warned that a cut in one place could mean unwanted increases elsewhere. Obama's vision for infrastructure would also overturn the existing system of congressional earmarks that determine much highway spending.
In talking about his own agenda, Hoyer said the economy must expand before Congress turns to reducing the deficit. Addressing the deficit without growth could push the country into a downward spiral of spending cuts, falling revenue and higher deficits that Hoyer likened to "chasing your tail down a rathole. "
On the call, California Democratic Rep. Xavier Becerra noted that Republicans hadn't offered much to respond to the economy. "What's the alternative?" he asked. "Do nothing? Leave the diving plane on autopilot?"
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