President Obama spoke briefly from the Rose Garden this morning about the economy. He acknowledged that the recovery is still fragile, but offered assurances that his team was, “hard at work on additional measures.” He offered few details, but pulled no punches in blasting GOP leaders for their obstruction of relief for small business. “I ask Senate Republicans to drop the blockade,” the President urged, referring to the persistent GOP filibuster of a small business aid bill that’s been stalled in the Senate since shortly after the House passed similar legislation this past March.
The small business aid bill, last blocked from going to the Senate floor at the end of July, includes $12 billion in tax relief and also creates a $30 billion fund intended to facilitate lending to small businesses. The tax breaks, designed to stimulate growth, include deductions for capital equipment investment and credits for new hires. With the large banks still withholding any funding for small business, the loan fund is designed to allow community and regional banks, those with assets under $10 billion, to fill the void. Small businesses need money to expand, and according to Bob Coleman, publisher of the Coleman Report, which provides information on small-business lending, many businesses are postponing expansion while they wait on the outcome of this bill.
Republicans in the Senate have spoken out against the bill, likening it to the TARP, which they all supported, but which has since fallen into disrepute. They label the bill as more Democrat spending, even though it’s fully paid for. Senate Minority Leader, Mitch McConnell explained that the Republicans had already been given 3 amendments to the bill, but that “three amendments is not enough.” Democrats countered that the border security provision offered by Republicans had nothing to do with small business, and that they would not allow the Republican maneuver to add a permanent extension to the Bush tax cuts. Republicans also complained about the $1.5 billion in aid to farmers contained in the bill, so Democrats removed the provision, but were still not able to sway any Republican support.
In his speech today, President Obama stated of the bill that, “there’s no reason to block it besides pure partisan politics.” Dean Baker, of the Center for Economic and Policy Research seems to be in agreement. Speaking in July, he characterized the standoff like this, “The Democrats want to hand money out to small banks and win some support among traditionally Republican backers, while the Republicans don’t want the Democrats to have any achievements to show when they campaign.” Even the U.S. Chamber of Commerce, who typically sides with Republicans, is fully in favor of the legislation.
So, how is it that the Party who purports to be a champion of small business, comes to resist, so adamantly, a bill designed to help that very segment? This is the same party that bases their defense of extending the Bush tax cuts for the rich on the detriment their expiration would have on small business, yet they won’t support this fully funded stimulus. Conservative voters should take heed, because this is just another piece, amongst a vast body of evidence that indicates where Republican loyalties are tied.
President Obama did mention a few other examples of efforts being pursued by his administration. He emphasized that they were still fighting for the extension of the Bush tax cuts for the middle class. Although he gave no indication of how they might achieve that without also extending the cuts for the rich. They are incapable without GOP support, and thus far, Senate Republicans remain firm in their resolve to force an across the board extension, that adds $678 billion to the deficit from relief for the rich, or nothing at all.
The President stated that further tax cuts to encourage businesses to create jobs in the U.S. were being considered. He also listed initiatives being pursued, such as, “rebuilding more infrastructure for the future” and “redoubling our investment in clean energy and research and development.” But he gave no details on these items, nor did he even mention the current stimulus, which is actively moving these initiatives forward. The stimulus which is so often maligned by conservatives, but credited by economists for avoiding 2 addition percentage points of unemployment and adding millions of jobs, is also providing a critical service in moving our nation into a clean, alternative energy future and building infrastructure in the areas of public transportation and a smart grid.
Much to the disappointment of many progressives, the President’s speech failed to clearly identify the severity of our current economic problems or the details of the administrations plan to address them. With both consumers and businesses tucking their money away, there’s little hope that things will change without further stimulus, but in an election year where the deficit hawks are out hunting for prey, Democrats appear to lack the resolve to promote such a bold action. The alternative is obviously a very slow recovery in which the middle class foots the lion’s share of the bill — and minus the public wherewithal to understand that the deficit has merely been presented to conveniently block further corrective action, we appear to be doomed to stew in this status quo.