Posted by Matt Dempsey Matt_Dempsey@epw.senate.gov

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Oklahoman

Editorial: Politics apparent in Obama's new economic proposals

Published: Sep 8, 2010

Link to Editorial 

DESPERATION wafts from President Obama's new proposals to jump-start the economy - $50 billion in infrastructure spending and $300 billion in tax breaks for business. Coming as they do less than two months before the midterm congressional election, it's hard not to chalk them up to politics.

With an ABC News/Washington Post poll showing 92 percent of Americans think the economy is in bad shape and more people (33 percent to 30 percent) believing Obama has made things worse than those who think he has improved them, the president is proposing more government spending and targeted tax cuts, hoping to at least be seen as trying to fix low growth and high unemployment.

Obama wants to spend $50 billion to launch a multiyear infrastructure improvement campaign that would start with 150,000 miles of roads, 4,000 miles of rail lines and 150 miles of airport runways. The White House would pay for the spending by eliminating tax breaks to the oil and gas industry.

In addition, the president would create a government-run infrastructure bank to attract money from private investors for loans for projects with regional transformational potential.

As for business taxes, Obama is proposing a new $200 billion tax cut to let firms write off 100 percent of new investments in plants and equipment between now and the end of 2011, and a $100 billion permanent extension of the business tax credit for research and development.

These look like a political "Hail Mary." Polling suggests Democrats are staring at electoral disaster in eight weeks, largely because Obama and his congressional allies overpromised and underperformed on the economy - while expending much time and energy on health care.

Now the president proposes more stimulus and business tax cuts. Where were these proposals last year? Why weren't "shovel-ready" projects like those Obama targets now included in last year's $800 billion-plus stimulus, as well as the proposed tax cuts?

We don't know if these ideas are too little, but they're embarrassingly late. An infrastructure bank run by Treasury? These people apparently never run out of ideas to expand government's reach.

Part of the calculus certainly involves turning likely Republican opposition against the GOP as the campaign season heats up. But even if Congress managed to fast-track these proposals, they would have no effect on the economy before Election Day.

Tax cuts? Sure. Democrats think they can pin Republicans if they say no. But maybe they'll say "thanks" instead (at least to the tax cuts) - while pointing to the economic incompetence that has the country where it is today, with this president trying to boost himself and his party with 11th-hour treats they hope will distract from their miserable record.

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