President Obama used his speech rolling out a stimulus-style jobs program Tuesday to point the finger at Republicans for allegedly facilitating the economic crisis and then foisting it off on his administration to solve.
While praising his own team for pioneering "ambitious" financial reform and "sweeping" economic recovery initiatives, the president took some pointed shots at Republicans who are now blasting the latest package as a spend-crazy "stimulus two" that will drill deeper into the deficit.
In the very next breathe, Obama bemoaned the corrosive partisan environment that lead to the crisis.
Obama said the crisis was caused not just by economic weakness but the "weakness in our political system" -- one corroded by the "bitterness of partisanship," and the "endless campaigns focused on scoring points instead of meeting our common challenges."
"We've seen the consequences of this failure of responsibility. The American people have paid a heavy price," Obama said, calling the nation's unemployment a "human tragedy
Now, if you're going to bemoan partisanship, it takes an awful lot of chutzpah to deliver a speech that is at the same time full of partisanship.
The meat of the plan is as follows.
The president's proposals addressed three main areas. He focused primarily on help for small businesses, targeting them with tax credits to encourage hiring and unused Wall Street bailout dollars to increase lending. He also backed a one-year elimination of the capital gains tax on gains from new investment in small business stock and other measures.
The other two priorities for the president were to call for infrastructure spending for highways, railroads, bridges, tunnels, airports and seaports, and a new program to give rebates to people who retrofit their homes so that they're more energy efficient. He also backed an extension of aid and health insurance assistance for the unemployed.
There are somethings that could work well here in theory. I am no fan of tax credits. I like marginal tax rate cuts more than credits because the first is permanent and the second is temporary. I am all for making the capital gains tax rate zero however I'd want to make it more permanent. Capital spending was a massive part of the initial stimulus and energy credits were also a part of the initial stimulus and neither has had any effect.
What's most troubling about the idea is that the Democrats and the president want to use the available TARP funds to pay for it. TARP, the Troubled Asset Relief Program, was meant to save the banks. First, we were told that we'd buy their so called "toxic assets". Then, after it was passed, the Bush administration decided to simply give banks the money. We were then told that the banks would return the money WITH INTEREST. We were told that the taxpayers might even make money on the deal.
That hasn't even come close to happening however TARP has cost about $200 billion less than what was initially projected. The original idea, as was passed in the bill in September of 2008, was to use any used funds to pay down the deficit. The administration appears to think that this money should be spent even though that's not what was stated in the bill.
Our deficit will be north of$1.5 trillion this year. The administration seems to think that since the final number will be $200 billion less than some estimates this is license to spend. Imagine you live pay check to pay check. You then max out your credit card to go on a lavish vacation. Then, you spend less than you first expected. Instead of using the savings to pay off some of the card, you buy a big screen television. That's about the logic that the administration currently has.