Obama: Slow Growth Beats 'Republican' Recession

(Sept. 8) -- President Barack Obama today pummeled Republicans as foes of the middle class and defenders of big business in remarks that were less about economic solutions and more an election-year warning that a Republican victory would return the nation to recessionary policies of the Bush years.

As billed by the White House, today's speech in Cleveland was supposed to feature the unveiling of ideas aimed at refueling a recovery that has sputtered in recent months.

While the president formally proposed a new tax credit to encourage business spending and promoted his plan for new roads and other infrastructure projects, his primary message was that slowing growth is still better than "flawed policies and economic weaknesses of the previous decade [that] culminated in a financial crisis and the worst recession of our lifetimes."

"Do we return to the same failed policies that ran our economy into a ditch, or do we keep moving forward with policies that are slowly pulling us out?" Obama said, drawing applause from the audience at the Cuyahoga Community College.

"Progress has been painfully slow," Obama acknowledged. "Millions of jobs were lost before our policies even had a chance to take effect. We lost 4 million jobs in the six months before I took office. It was a hole so deep that, even though we've added jobs again, millions of Americans remain unemployed."

But Obama blamed the sluggish recovery in part on Republican leaders in Congress who, he charged, chose to "sit on the sidelines and let Democrats solve the mess."

Obama, who didn't mention that Democrats have controlled Congress since he took office, again took particular aim at John Boehner, the House Republican leader and the man the White House apparently wants to run against in this midterm election cycle when the presidency itself is not at stake.

Noting that Boehner preceded him to Cleveland to lay out an economic agenda last month for Republicans, Obama accused the Ohio congressman of offering no new policies or ideas.

"There was just the same philosophy that we had already tried during the decade that they were in power -- the same philosophy that led to this mess in the first place: cut more taxes for millionaires and cut more rules for corporations," Obama said as many in the crowd shouted "no."

"Their argument is that we should let insurance companies go back to denying care for folks who are sick or let credit card companies go back to raising rates without any reason," Obama said.

Boehner, asked earlier in the day if he felt like the president's new punching bag, suggested Obama is "out of touch."

"The American people are asking the question, 'Where are the jobs?' " Boehner said during an interview on ABC. "And yet here's the White House worrying about what I've got to say instead of working together to get our economy going again and to get jobs back in America."

But asked whether he would support Obama proposals that Republicans have backed in the past -- including the business tax credit for equipment purchases and development costs through 2011 -- Boehner declined to answer, saying only that the "president's missing the bigger point here."

Boehner's office announced his own two-part plan to revive the economy, but it's one that may play into Obama's charges about a return to the past.

Boehner wants to pass a bill cutting all nonmilitary discretionary spending to fiscal 2008 levels, including a nullification of any unspent funds from last year's stimulus bill. And he wants to put a two-year freeze on current tax rates that would keep in place the tax cuts pushed through by President George W. Bush, which are set to expire at the end of the year.

That second idea is one of the biggest points of friction between Republicans and Democrats, who want to extend all the Bush tax cuts except for those affecting households that earn at least $250,000 a year.

After arguing for the need to keep middle-class tax rates lower -- he mentioned the middle class more than 15 times today -- Obama said Boehner "and his party believe we should also give a permanent tax cut to the wealthiest 2 percent of Americans."

"With all the other budgetary pressures we have, with all the Republicans' talk about wanting to shrink the deficit, they would have us borrow $700 billion over the next 10 years to give a tax cut of about $100,000 each to folks who are already millionaires," Obama said. "Let me be clear to Mr. Boehner and everybody else: We should not hold middle-class tax cuts hostage any longer."

Treasury Secretary Timothy Geithner, speaking later on CNBC, said extension of the tax cuts is one of the two most important acts Washington can currently take to boost economic growth. The other, he said, is passage of a package of tax cuts and hiring incentives for small businesses that has been held up by Republicans in the Senate.

But neither the White House nor Republican leaders on Capitol Hill seem inclined to work with each other now or anytime before the election to enact new economic measures.

In the mean time, the Federal Reserve's latest compilation of reports from the finance and business contacts of the regional Fed banks suggested that the economy is still growing but that there are "widespread signs of a deceleration."