GOP Support for Obama?

At first glance of the Republican presidential debate on Thursday, it seems as though they supported President Obama:

Perry—“Americans want a leader who has a proven record of job creation.”
Guess what? When Obama took office, we were losing over 700,000 jobs a month. Without Obama's stimulus package, the Labor Department estimated we would have lost more than 11 million jobs.

Then came healthcare reform, with 32 million new patients added to the insurance pool and a saving of over $230 billion, according to the Congressional Budget Office.

Furthermore, Obama passed Wall Street reform, holding executives accountable, ending "too big to fail" bailouts, and enacting the strongest consumer protections in history.

All these measures have helped. The Congressional Budget Office, for example, just released a report finding that Obama’s Recovery Act created around 2.5 million jobs, and shaved a full percentage point off of the unemployment rate.

Hunstman –“We need to fix the underlying structural problems in this economy.”
Since the beginning of the Reagan years, the share of total income captured by the top 2 percent of earners has rapidly increased while the share taken by the rest of the country has fallen. A recent U.S. Census Bureau study finds that America’s poverty rate is now the worst since 1993, with over 46 million Americans living below the poverty line (a family of four earning less than $22,000). Further, adjusted for inflation, the middle-income family only earned 11% more in 2010 than they did in 1980, while the richest 5% in America saw their incomes surge 42%.

Simply put: the rich have been getting richer at the expense of the poor and the middle-class. Which is why Obama has proposed letting the Bush tax cuts expire and imposing the Buffett Rule.

Under President Clinton, the marginal tax rate was at 39%, yet we still created more than 23 million net new jobs with about 90% in the private sector in less than eight years! However, under President Bush (with a lower marginal tax rate of 35%), our economy had a net growth of only 3 million new jobs and ZERO in the private sector (not to mention we went from a $200 billion surplusto an incredible $1 trillion deficit).

The Buffett Rule asks the wealthiest to pay their fair share. Typically, the wealthiest Americans derive a lot of income from investments, which are often classified as “carried interest” and later taxed at a lower rate (around 15%) than ordinary income such as wages (around 36%). As a result, they can end up owing a lower percentage of their income in federal taxes than someone who makes far less money. The concept of the Buffett Rule is to prevent this corporate loophole.

Romney—“The people who have been most hurt are the middle-income families.”
President Obama agrees and has acted on it. His American Jobs Act will create jobs fixing roads and bridges, give tax credits to small businesses that hire new workers, extend the line of credit to these businesses, and put more money in the wallets of the average worker.

Caine –“It’s out of control.”
You bet it is! Even though Governor Perry’s home state of Texas ranks 6th in terms of people living in poverty—one in five--has one of the lowest rates of spending on its citizens per capita, and the highest share of those lacking health insurance; or that during his tenure as Governor, Romney’s state ranked 47th in the country on job creation; they are quick to blame Obama for the economic downturn.

But when it came down to extending healthcare for millions of Americans, extending unemployment benefits, extending payroll tax cuts, or providing tax incentives for small businesses, Republicans screamed for lower taxes on the wealthiest 2 percent.

When it came to repealing Don’t Ask Don’t Tell, ratifying a new Start Treaty, ending the Iraq War, stimulating the economy to prevent a collapse of the US Auto Industry, or investing in long-term job growth projects like infrastructure and clean energy, Republicans screamed for repealing Obamacare.

And now when it comes to passing the American Jobs bill to reduce our deficit, create jobs, and provide relief to our middle-class and small businesses, Republicans have said nothing.

But, if Republicans want a "leader who has a proven record of job creation", who understands how to "fix the underlying structural problems in this economy", who has helped "the people who have been most hurt", and does not get us "out of control", I guess they found their answer in Obama.

Pay Your Fair Share

The health of our economy depends on what we do right now. Today, President Obama laid out his plan to pay for the American Jobs Act and reduce the deficit by $4 trillion.

AMERICAN JOBS ACT

Short Run –Tax cuts for working and middle class families; tax cuts for small businesses to help them hire and grow; and aid to state governments to prevent the layoffs of thousands of teachers and other public workers.

Long Run –Investments in long-term economic growth areas (education, clean energy, and infrastructure).

DEFICIT REDUCTION

Letting the Bush tax cuts expire – Under President Clinton, the marginal tax rate was at 39%, yet we still created more than 23 million net new jobs with about 90% in the private sector in less than eight years! However, under President Bush (with a lower marginal tax rate of 35%), our economy had a net growth of only 3 million new jobs and ZERO in the private sector (not to mention we went from a $200 billion surplus to an incredible $1 trillion deficit).

The Buffett Rule –Asks the wealthiest to pay their fair share.

Although Republicans claim this will hurt businesses, one of the most successful businessmen, Warren Buffett, disagrees. As he discussed in a New York Times op-ed, we need to “get serious about shared sacrifice.”

Typically, the wealthiest Americans derive a lot of income from investments, which are often classified as “carried interest” and later taxed at a lower rate (around 15%) than ordinary income such as wages (around 36%). As a result, they can end up owing a lower percentage of their income in federal taxes than someone who makes far less money. The concept of the Buffett Rule is to prevent this corporate loophole.

THE CHOICE

With a recent U.S. Census Bureau study indicating that America's poverty rate is now the worst since 1993, with over 46 million Americans living below the poverty line (a family of four earning less than $22,000), the choice becomes evident. As President Obama understands:

"Either we ask the wealthiest Americans to pay their fair share in taxes, or we’re going to have to ask seniors to pay more for Medicare. We can’t afford to do both.

Either we gut education and medical research, or we’ve got to reform the tax code so that the most profitable corporations have to give up tax loopholes that other companies don’t get. We can’t afford to do both."

The American Jobs Act

Yesterday, on the tenth anniversary of 9/11, the nation honored those who risked their lives and helped America rise from the rubbles – the firefighters, police officers, and other rescue workers.

But to increase America’s competitiveness in a global marketplace, withstand the pressures from a European financial crisis, decrease unemployment, and help restore the financial stability of our nation, we must assist the others who also serve their communities – the teachers, small-business owners, and the middle-class.

That’s who the American Jobs Act would help:

1. It provides tax cuts for small businesses
Small businesses have generated 64 percent of net new jobs over the past 15 years . This tax cut will lower these businesses’ costs and provides incentives to increase wages and hire more unemployed workers.

2. It helps out-of-work Americans by extending unemployment benefits

3. It provides tax cuts for the middle-class
By reducing payroll taxes, Obama’s new jobs act would put more money in the pockets of working Americans.

4. It aids states to prevent layoffs of teachers, police officers, firefighters, and other government employees

5. It invests in infrastructure to create immediate employment

Read the White House factsheet:

By providing BOTH tax cuts and spending increases, Obama’s plan will boost our economy.

According to Mark Zandi, chief economist at Moody's rating agency and former adviser to Republican presidential candidate John McCain, the plan will add to economic growth, add nearly 2 million jobs and reduce the unemployment rate. Further, he mentioned that, "There should be nothing controversial about this piece of legislation. Everything in here is the kind of proposal that's been supported by both Democrats and Republicans.”

So far, Republican House Majority Leader Eric Cantor has shown willingness to compromise. Let’s hope it stays that way.

Man-Made Problems: Man-Made Solutions

Last night, the top Republican presidential candidates competed in their 4th in a series of debates. In my opinion, Texas Gov. Rick Perry and former Massachusetts Gov. Mitt Romney—stole the show.

Rick Perry:
Not only does his state have one of the lowest high school graduation rates in the nation, but it also has one of the highest poverty rates and more people working for the minimum wage than other states.

In regards to Social Security, he made the claim that, quite frankly, it doesn’t matter and that “it is a monstrous lie, it is a Ponzi scheme.” But as the Social Security Administration points out, Social Security is a major source of income for the elderly, with nine out of ten Americans age 65 and older receiving benefits. This year alone, nearly 55 million Americans are said to receive benefits.

Mitt Romney:
During his tenure as Governor, his state ranked 47th in the country in job creation, according to the Labor Department.

And although his universal healthcare plan in Massachusetts has made the state’s rate of uninsured one of the lowest in the country, it has also failed to rein in costs, resulting in rising health insurance premiums.

But while it did serve as a template for President Obama’s healthcare plan (imposing an individual mandate, subsidies for low-income persons, requirement for employers, etc), RomneyCare is noticeably different in its financing.

As a nationwide plan implemented by the federal government, Obama’s healthcare law was able to reduce healthcare costs in the long-run by reducing wasteful spending in Medicare, closing the prescription drug payment donut hole for seniors, imposing taxes on high-cost healthcare plans, and regulating the entire healthcare industry to remove wasteful spending. The Massachusetts plan does not do any of these things.

Despite the ability of Obama’s healthcare plan to out-finance his state’s own plan, Romney continues to push for its repeal. He also continues to denounce the positive effects of the Recovery Act.

Obama’s New Jobs Plan
Which brings us to President Obama’s speech tonight.

Although Obama’s first stimulus package has prevented another Great Depression (as I discussed in my last blog post “Men Lie, Women Lie, Numbers Don’t”), its funds have waned and we need a second stimulus to further the progress we have made.

Thus, by providing tax cuts for working and middle-class families; giving tax incentives to small businesses that add new workers; aiding state and local governments to hire more teachers and refurbish schools; and investing in infrastructure to create immediate jobs, the American Jobs Act is investing in our greatest asset: the working American middle-class. And by closing corporate tax loopholes and asking the wealthiest Americans to finally pay their fair share, the Jobs Act is fully paid for.

As Obama mentioned, both Democrats and Republicans agree that, “it has been the drive and initiative of our workers and entrepreneurs that has made this economy the engine and envy of the world…[But] there has always been another thread running throughout our history - a belief that we are all connected; and that there are some things we can only do together, as a nation.

President Kennedy once said, "Our problems are man-made - therefore they can be solved by man. And man can be as big as he wants."

Men Lie, Women Lie, Numbers Don't

This Thursday President Obama will be addressing the nation on the specifics of his plan to further stimulate job growth and aid our struggling economy.

Although we have made tremendous progress, we need to make sure that we continue growing the economy and do not revert back to failed policies. With unemployment still high and slow job growth, we need to ensure that more burden is not placed on the working class.

For those that continue to claim that we need to continue decreasing taxes for the wealthiest two percent in order to stimulate growth, I argue the opposite.

Under President Clinton, the marginal tax rate was at 39%, yet we still created more than 23 million net new jobs with about 90% in the private sector in less than eight years! However, under President Bush (with a lower marginal tax rate of 35%), our economy had a net growth of only 3 million new jobs and ZERO in the private sector (not to mention we went from a $200 billion surplus to an incredible $1 trillion deficit).

Put simply, the wealthiest two percent have had these tax cuts for nearly a decade now and the level of job growth is still weak.

Although there are many other factors that have also contributed to our weakened economy, when the choice comes down to providing tax breaks to the richest or the middle-class, I would rather give more money to those that are likelier to spend it than save it: the middle-class.

Last year, Obama lowered the payroll tax for millions of middle-class Americans. These tax cuts are set to expire at the end of the year, effectively raising taxes on the working class. However, many in the Republican leadership are already promising to let them expire.

In December, the same group threatened to raise taxes on all families unless President Obama agreed to extend the Bush tax cuts for the wealthy. Then last month Republicans in Congress (and each of their presidential candidates) continually threatened to force a default on our obligations, resulting in the first US Credit downgrade in our history.

Further, Republicans have repeatedly denounced the positive effects of Obama’s stimulus package passed within the first month of his administration. But as Jay-Z points out, “men lie, women lie, numbers don’t.” Here are some numbers:

When Obama took office, we were losing over 700,000 jobs a month. Without an immediate government stimulus, the Labor Department estimates we would have lost more than 11 million jobs.

Then came healthcare reform, with 32 million new patients added to the insurance pool and a saving of over $230 billion, according to the Congressional Budget Office.

Furthermore, we passed Wall Street reform (holding executives accountable, ending "too big to fail" bailouts, and enacting the strongest consumer protections in history) and ended the Iraq War (saving billions of dollars).

All these measures have helped. The Congressional Budget Office, for example, just released a report finding that Obama’s Recovery Act created around 2.5 million jobs, and shaved a full percentage point off of the unemployment rate.

Yes we still have many problems, but Obama’s efforts have kept a bad situation from getting worse.

Democrats and Republicans both want to cut spending. But we should not focus on providing more tax breaks for the rich at the expense of cutting spending on education, infrastructure, or extensions to the payroll tax.