President Barack Obama is proposing a flurry of economic measures but may be doing too little, too late to fend off a huge Republican wave in November congressional elections, with Democrats losing their majority in the House of Representatives and, perhaps, the Senate.
With less than two months remaining before the critical vote, Americans are in a sour mood over an unemployment rate stubbornly holding near 10 percent and an economy that has made little progress in pulling the nation out of its worst downturn since the Great Depression of the 1930s.
Polls are virtually unanimous in showing Democrats primed to surrender their big majority in the House as voters prepare to cast ballots against incumbents and in favour of new blood from among Republicans and candidates aligned with the ultraconservative tea party phenomenon. Republican chances for taking a majority in the Senate are slim but not impossible.
In a speech in Cleveland, Ohio, on Wednesday, Mr. Obama will ask Congress to pass new tax breaks that would allow businesses to write off 100 percent of new capital investments through 2011. Additionally, Mr. Obama is seeking a $50 billion infrastructure investment plan to boost employment and a permanent expansion of tax credits to companies for investment in research and development.
On Friday morning, Mr. Obama will discuss his economic programme in only his second televised news conference of the year.
Several million people and 1.5 million businesses would benefit from the tax breaks, according to the White House. Estimates put the cost to taxpayers over 10 years at $30 billion, with most of the money lost in tax revenue being recouped as the economy strengthens.
The news conference will cap a week of appearances in which the president is rolling out new spending and tax cut proposals aimed at helping the economy. Mr. Obama unveiled a $50 billion transportation infrastructure proposal on Monday at a Labour Day rally with union members in Milwaukee.
Mr. Obama showed little life on the economy through a summer that his administration said would witness a major recovery as a result of the nearly $800 billion stimulus he pushed through Congress shortly after taking office in early 2009.
As the economy continues to languish, support for Democrats in Congress has declined in lockstep with backing for Mr. Obama. The president’s popularity decline is notable given what were his very high ratings when he swept into the White House on a message of hope and change in the midst of a fiscal crisis and near collapse of the country’s financial system.
The big changes Mr. Obama now wants to make, while they ordinarily would find philosophical support among opposition Republicans, stand little chance of congressional approval in the toxic pre—election atmosphere. Republicans have been near unanimous in voting “no” on Mr. Obama’s initiatives in Congress. What’s more, many of the president’s fellow Democrats are leery of voting for more spending so close to the election.
Even if the measures passed, they would do little, if anything, to quickly improve the dismal economy.
Republicans, however, have made significant political gains by accusing Mr. Obama of extravagant spending and expansion of government that will burden taxpayers and their children for years to come. That has led to widespread expectations that the Republicans will take at least 40 House seats from the Democrats to gain the majority.
Expectations are so low for the Democrats, however, that even holding on to a slim majority would be called victory.
Keywords: American economic measures