Obama: Republicans Are Playing Politics, 'Pure and Simple'

In Cleveland, President Announces New Incentives for Businesses.

September 7, 2010, 5:25 PM

WASHINGTON, Sept. 8, 2010— -- In a political speech reminiscent of his 2008 campaign, President Obama today proposed new incentives for businesses and assailed Republicans for impeding his efforts and for wanting to revert to "the same philosophy that led to this mess in the first place."

"On issues like this one, the only reason they're holding this up is politics, pure and simple. They're making the same calculation they made just before the inauguration: If I fail, they win," Obama said in a Cleveland speech to a standing ovation. "Well, they might think this will get them where they need to go in November, but it won't get our country where it needs to go in the long run."

Obama today pushed for incentives that would allow businesses to write off 100 percent of their spending on new plants and equipment through the end of 2011 and retroactive to Sept. 8.

The proposal, White House officials said, would benefit 1.5 million companies and would be "the largest temporary investment incentive in American history," resulting in tax cuts of $200 billion over two years. The president also urged the Senate to pass the small business jobs bill that has stalled because of partisan deadlock.

But even before the president took the stage to announce his proposals, the ongoing stalemate between Republicans and Democrats cast a shadow on the idea.

Both sides have called for bipartisanship but neither has extended a hand to the other. Obama today placed the blame solely on the previous administration for turning a budget surplus into a deficit and for implementing economic policies that help the rich.

Republicans blame the White House and Democratic leaders in Congress for sending the nation's debt skyrocketing and passing big bills such as health care and economic stimulus, but failing to bring down an unemployment rate that still hovers near 10 percent.

They've called on extending the Bush administration tax cuts that will expire at the end of the year, a significant point of contention between the two sides.

"Americans want jobs, not more government, more debt and more taxes," Senate Minority Leader Mitch McConnell, R-Ky., said in a statement. "Let's start today with a declarative statement against tax hikes on the small businesses that are critical to expand and create jobs."

Others denounced Obama's speech today as a "PR stunt."

Sen. Orrin Hatch, R-Utah, who himself called to extend the research tax credit that Obama pushed for today, dubbed the plan as "job killing."

"I don't think anyone believes an administration that created these problems is going to be able to come up with effective solutions to get us out of them," Hatch said in a statement. "That's like putting Bernie Madoff in charge of fixing your company's broken accounting system."

The president wants to let the tax cuts expire for families earning more than $250,000 a year, a move the GOP argues will hamper the country's fragile economic recovery.

But the president today defended his decision as one that would benefit the middle class. In a fiery political speech that was as much about midterm elections as it was about incentives for businesses, Obama defended his record and placed the blame of "flawed policies and economic weaknesses" solely on the previous Republican administration.

He specifically called out House Minority Leader John Boehner, R-Ohio, who spoke in the same city last month, eight times.

"There were no new policies from Mr. Boehner," he said. "There were no new ideas. There was just the same philosophy we already tried for the last decade; the same philosophy that led to this mess in the first place. Cut more taxes for millionaires and cut more rules for corporations."

"I believe we ought to make the tax cuts for the middle class permanent. These families are the ones who saw their wages and incomes flatline over the last decade -- and they deserve a break. And because they are more likely to spend on basic necessities, this will strengthen the economy as a whole," the president added.

Boehner went on his own media offensive earlier today, calling for a bill that would cut non-security spending to 2008 levels and enact a freeze on tax rates.

"I'm open to the president's idea but I think the president is missing the bigger idea here," Boehner said on "Good Morning America" today. "And that is, with all the spending in Washington and all the uncertainty facing small businesses, including the coming tax hikes on Jan. 1 -- Until this uncertainty and spending is under control, I don't think these are going to have much impact."

Obama Proposes Incentives for Businesses

For Democrats fighting for their political lives this fall amidst a dismal economic picture, the president's proposals come as welcome news.

"The thrust of this is in the right direction," Rep. Chris Van Hollen, D-Md., chairman of the Democratic Congressional Campaign Committee, said Tuesday on CNN's "American Morning." "It's to continue to get people back to work, to accelerate job creation, and not go back to the policies that got us into this mess."

Small business owners say the write-off has tremendous benefits when it comes to cost savings, but among both business owners and politicians, there is little hope the proposals will translate into policy any time soon.

When lawmakers return next week from their summer vacation, the first order of business for the Senate won't be any of Obama's latest proposals, but rather a $30 billion small business bill that has been stalled since June, evidence of the partisan gridlock in Congress.

But business owners are not holding their breath for any big changes in the next few months. For all the talk, the chances of action in the near-term appear slim, with Congress skittish about the country's soaring debt and ever more focused on the upcoming elections.

"There's a lot of politics in almost everything that happens in Washington right now," said Todd McCracken, president of the National Small Business Association. "There's plenty of blame to go around and the problem is, [in] the political system that we have right now, there are more incentives to fight and to put out proposals that are more symbolic than real ... incentives to get things done."

There is rising frustration among small business owners about the stalemate, and while it's directed at both parties, it's likely to hurt Democrats more in November, McCracken said.

Gene Owens, a small business owner in Pennsylvania, said there is doubt that proposals coming from Democrats or Republicans are genuine.

"The uncertainty is the most difficult thing about life right now as a business owner," Owens said. "Most business owners see this as just politics. It's just a lot of political jerry-rigging and it's not addressing the real issue."

According to the latest ABC News/Washington Post poll, 33 percent of Americans believe Obama's economic program has made the economy worse, while only 30 percent believe it has improved the situation. Moreover, a record 57 percent disapprove of how the president has handled the economy.

Making matters worse, at a time when the November elections are fast approaching, there is no quick fix for the White House -- not with Congress more focused on campaigns than anything else for the next 60 days. Whether the White House, and businesses, like it or not, this fall is about campaigning, not passing major legislation.

Even Obama's former budget director Peter Orszag said Tuesday that the tax cuts should be extended for two years.

"Higher taxes now would crimp consumer spending, further depressing the already inadequate demand for what firms are capable of producing at full tilt," wrote Orszag, the former director of the Office of Management & Budget, in a column in the New York Times.

In addition to Orszag, a handful of Senate Democrats have also weighed in against letting the tax cuts expire. That is not welcome news for an administration already wrestling with partisan gridlock, the possible loss of power on Capitol Hill and a growing number of Americans who disapprove of its handling of the economy.

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