Sluggish Economy May Be Bad News for Democrats

WASHINGTON (July 30) -- New government data showing the economic recovery moving at a snail's pace may have been the last thing congressional Democrats wanted to take with them as they rush home to campaign during the summer recess.

The U.S. Commerce Department reported today that second-quarter economic growth slowed to 2.4 percent. The report indicated that consumers are keeping a tight grip on their money even as business investment showed encouraging signs of life.

White House economic adviser Christina Romer said in a statement that the "solid rate of growth indicates that the process of steady recovery from the recession continues," but added that "much work clearly remains to be done before the U.S. economy is fully recovered."

She added, "Moderate, sustained GDP growth is a vast improvement over the terrible declines in GDP of late 2008 and early 2009," before the Obama administration's economic policies kicked in.

The bottom line, though, is that the recovery is still too weak to produce enough new jobs to bring down high unemployment rates significantly by Election Day.

"This is another indication that the incumbent party, the Democrats, will be losing a substantial number of seats in Congress," said Larry Sabato, director of the Center for Politics at the University of Virginia. "Voters use midterm elections to send messages about their unhappiness -- and there are millions of families suffering this particular kind of unhappiness this year."

The latest economic news comes as debate heats up over whether to extend the Bush tax cuts to goose spending amid fears of a double-dip recession as federal stimulus dollars run out.

"Democrats facing tough re-election fights will have an even harder time justifying their vote for the stimulus' bailout," said Jonathan Collegio of American Crossroads, an independent group working to elect Republicans this fall. "A bill they thought would raise all their ships has turned into a millstone around their necks."

Said Republican strategist Ron Bonjean, "It reinforces that Americans aren't seeing or feeling an economic recovery before November and puts immense pressure on Democrats to extend the Bush tax cuts before they expire."

But White House spokesman Robert Gibbs, speaking to reporters aboard Air Force One as President Barack Obama flew to Michigan to tout the government bailout that revived the U.S. auto industry, accused Republicans of playing politics by refusing to cut capital gains taxes for small businesses.

"That's the best response -- short-term response we could have to these numbers -- for the Republican Party that preaches it virtually, virtually every time somebody puts a tape recorder in their face, about how much they want to help small business. Now it's time to walk the walk, not just talk the talk," Gibbs said. "It took us eight years to get into this economic mess, and it's going to take us more than a year and a half to get out of it. "

Although the latest Gallup tracking poll showed Democrats ahead by a significant margin for the second week in a row, the drip-drip-drip of dismal news has continued to pummel the party in power, which usually loses congressional seats in midterm elections.

Gibbs acknowledged the challenge facing Democrats this November -- only to have his head handed to him for his candor. And that was before congressional Democrats learned Thursday that they faced a rare ethics trial this fall. The controversy around Rep. Charlie Rangel, the 20-term veteran congressman from New York, has been a gift to Republicans, who have charged House Speaker Nancy Pelosi with failing on her promise to "drain the swamp" of corruption on Capitol Hill.

Yet for most voters, Rangel is a sideshow to the slumping economy that hits much closer to home.

"We learned in civics class that elections tend to be more about pocketbooks than about anything else," said political analyst Charlie Cook. "People are very, very worried and upset about the economy, and I don't think the president and Democrats have done enough on that. They've been preoccupied with other things" such as health care and financial reform.

That's a point Republican leaders made as they readied their caucus for the summer recess, also known as the "district work period." The House Republican Conference distributed a detailed guide filled with six weeks' worth of talking points and tweets that begins and ends with jobs and focuses heavily on the bleak economic picture it lays at the door at the Democratic majority in Washington.

"Administration's 'Recovery Summer' Gets Derailed by Its Own Economic Policies ... and Reality," House Republican Whip Eric Cantor's office e-mailed soon after the Commerce figures were released.

While the second-quarter report gave the GOP ammunition for targeted attacks in August, political analyst Stuart Rothenberg said it's the government's economic indicators in September and October, after summer vacations are over and voters start focusing on the election, that will count.

"Republicans will work these into the narrative between now and Labor Day when we'll see these numbers regurgitated constantly," he said. "But the more important numbers will come this fall. That's when voters will really decide if they are going to send a message to Washington and what kind of message that will be."