Obama plan to stimulate economy faces opposition in election season

President Obama unveiled new ideas today to stimulate the economy and help lagging unemployment. His middle of the road approach includes Republican and conservative strategies to reduce taxes. But in this campaign season, the Congressmembers responsible for passing a plan are talking past each other and disagreeing on ideas they once endorsed. FSRN’s Leigh Ann Caldwell reports.

TRANSCRIPT:

At a community college near Cleveland, Ohio President Obama described the difference between Democratic and Republican economic plans.

Shrouded in campaign politics, the President highlighted his new economic proposals in the same town, where just two weeks ago, the Republican leader of the House of Representatives unveiled his own economic plan.

BARACK OBAMA: Do we return to the same failed policies that ran our country into a ditch, or do we continue on the policies that are slowly pulling us out?

The irony is that the President’s economic proposals are not much different from Republican ideas. But because Republicans are objecting to any idea offered by a person with ‘Democrat’ next to his name, consensus is unlikely.

President Obama proposes a permanent tax credit for business research and development. He also proposes that businesses write off all capital improvements through 2011.

Economists Heather Bouchey with the liberal-leaning Center for American Progress dislikes the idea. She says the tax cuts do little to spur the economy.

HEATHER BOUCHEY: With borrowing already so low, it’s not the main concern. What you see in survey after survey of small businesses is that they simply don’t have enough customers to justify investments right now so it all comes back to demand.

But Obama has embraced the idea. Business tax cuts are proposals that Republicans have promoted. Obama’s third proposal is an additional 50 billion dollars in funding for investment on roads and infrastructure. A similar idea implemented by the Tennessee Governor was promoted by Republican ally, the US Chamber of Commerce, as recently as July.

Wednesday morning, Republican John Boehner was interviewed by George Stephanopolis on Good Morning America. He offered a hint of willingness to work together.

JOHN BOEHNER: George, I am open to the President’s ideas.

But, the tone quickly changed. Instead of talking about the President’s Republican-friendly proposals, Boehner focused on issues that have no chance of going anywhere.  Boehner calls it his "two-point plan" -- freezing government spending and extending the Bush era tax cuts.

BOEHNER: I’d like to work on two things, instead of waiting until after the election, why don’t we pass a bill this month at 2008 spending levels before the TARP, the bailout the stimulus. And why wouldn’t we work together to ensure that all current tax rates are going to be extended for two years.

In this election season, ideas that might once have been agreed on have a slim chance of moving forward.  Instead, the economic focus this fall will likely be around the Bush era tax cuts. As Boehner said, Republicans want them extended for at least two years. President Obama and most Democrats say they need to be repealed on all couples making  more than 250 thousand dollars per year.

OBAMA: For any income over this amount, the tax rates would just go back to what they were under President Clinton. It’s because we can’t afford the 700 billion dollar price tag.

For at least the next 9 weeks, until election day, Republicans will likely talk about curtailing spending as a means to spur the economy while Democrats are expected to discuss investment and incentive.

Two ideologies that in this political climate will see little common ground, even if they aren’t that many worlds apart.

Leigh Ann Caldwell, FSRN, Washington, DC.