Obama: GOP Holding Small Business Bill 'Hostage'

(Aug. 30) -- President Barack Obama, blaming political gridlock for stifling the nation's economic recovery, called on Republicans to "drop the blockade" on a package of tax cuts and hiring incentives for small businesses that has been held up for months in the Senate.

Obama spoke at a time when his administration and the country's monetary stewards at the Federal Reserve have seen high unemployment defy their efforts to stimulate enough demand for products and services to prompt employers to hire new workers. He said his "economic team is hard at work identifying additional measures that could make a difference in both promoting growth and hiring in the short term and increasing our economy's competitiveness in the long term."

But appearing in the White House Rose Garden today after a meeting with his economic advisers that went 45 minutes longer than scheduled, the president offered no new proposals.

Instead, Obama renewed his call for Republicans to stop filibustering a bill that would cut taxes for American industry and provide loans to small businesses aimed at creating new jobs.

"This bill has been languishing in the Senate for months, held up by a partisan minority that won't even allow it to go to a vote," Obama said. "Holding this bill hostage is directly detrimental to our economic growth, so I ask Senate Republicans to drop the blockade."

Republicans' increasing criticisms of his own leadership on the economy ahead of the midterm elections, just over two months away, seemed to be a key factor in Obama's late-scheduled appearance in the Rose Garden.

He opened by noting that the country's current economic troubles began to peak almost two years ago, during the administration of President George W. Bush, and that it "took nearly a decade to dig the hole that we're in, and that it would take longer than any of us would like to climb our way out."

His message wasn't helped by a malfunctioning White House sound system, which made him repeat that last line twice.

One of the biggest problems for Obama and fellow Democrats is that much evidence of the slowing economic growth and deteriorating job market has emerged during the summer months when the party was expecting to gain political traction from the stronger economic signals earlier in the year.

Instead, hiring has slowed, consumer spending has stagnated, and the government said Friday that the economy grew more slowly in the spring than it initially thought.

Also on Friday, Federal Reserve Chairman Ben Bernanke said the Fed would consider using nontraditional ways of fostering growth if the economy -- which is indeed growing, however slowly -- takes a turn for the worse. But he noted that "central bankers alone cannot solve the world's economic problems."

And hours before Obama spoke, the Bank of Japan held its own emergency meeting to deal with a foundering economy and currency problems that demonstrated its lack of new tools to handle the problem.

Even as the government there announced more than $10 billion in new stimulus spending, the Bank of Japan said it would make 10 trillion yen ($118.07 billion) in six-month loans available for Japanese banks. This comes on top of a 20 trillion yen program of three-month loans already in place, and the unenthusiastic reaction of financial markets overseas suggested there's little confidence that today's actions in Tokyo will improve the situation.

With little congressional support for new stimulus measures in the U.S., thanks to a renewed political focus on the budget deficit, Obama has few economic options at his disposal, a predicament he recognized today in calling for passage of the small business bill.

"This bill is fully paid for. It will not add to the deficit. And there is no reason to block it besides pure partisan politics," he said.

Citing a report in USA Today that small businesses have put hiring, purchases and expansion plans on hold as they wait for a Senate vote on the measure, the president argued it "will benefit small-business owners and our economy right away."

While Senate Republicans didn't react immediately to Obama's remarks, the party has been betting its chances in November on opposing Obama's economic initiatives, and it seems unlikely that will change when Congress reconvenes next month.

But after Obama spoke, it still wasn't clear what new ideas Democrats would add to the debate either.

White House spokesman Robert Gibbs told reporters later that in the coming weeks Obama will talk about "targeted measures to continue to spur our recovery and to create an environment in which the private sector is hiring," but nothing in scale akin to last year's stimulus package.

There is no one "switch to flip and then the economy would somehow get better overnight," Gibbs acknowledged. "I think those in America are frustrated, I think those in the West Wing are frustrated, I think people across the country are frustrated."

"There's only so much that can be done," he said.