“The American Economy Is Again Progressing,” Says President’s Economic Advisor

By Mariko Lamb-Talk Radio News Service

Lawrence Summers, Director of the National Economic Council and Assistant to the President for Economic Policy, discussed the progress that the Obama administration has made thus far in economic recovery and voiced his confidence that the U.S. will be able to overcome the current economic challenges.

“Substantial progress has been made in rescuing the economy from the risk of economic collapse that looked all too real six months ago,” Summers said.

He reported that “many private forecasters expect to see positive growth in the second half of this year.” Additionally, reports have indicated improved consumer and business sentiment, a 33% decrease in investment grade corporate bonds, and a slower pace of GDP contraction.

A slight pause in Summers’ optimism ensued upon the mention of the high unemployment rate facing the U.S. “Unemployment is substantially higher and job loss has been greater than most observers predicted last winter...unemployment is likely to rise in coming months,” he admitted.

He claimed, however, that although the high unemployment rate is a significant problem, it “does not provide a basis for concluding that the Recovery Act is falling short of its goals.” He advised Americans to be patient since the “peak impact of the stimulus on jobs” is not projected to be achieved until the end of this year.

"While unemployment continues to contract, the available indicators suggest that GDP is on close to a level path with prospects for positive growth to commence during this year,” Summers concluded.

McCain-Palin campaign attacks Obama's tax proposals

"The reality is not that Barack Obama has a tax-cut, or even a plan to make jobs. The reality is that he has a plan that is riddled with bad incentives, full of targeted handouts, and fundamentally based on redistribution of wealth, and stands in sharp contrast to John McCain's approach." This was stated by Doug Holtz-Eakin, Senior Policy Adviser for the McCain-Palin campaign, in response to Senator Barack Obama's (D-IIll.) tax reform plan. Nancy Pfotenhauer, Senior Policy Adviser for the McCain-Palin campaign, said Obama's tax plan "punishes achievement".

The campaign advisers claim Obama's tax reforms amount to "sending checks to individuals, many of whom may not be working, and who certainly do not have a tax liability". They added that Obama's tax cuts for job creation in American businesses are "too little too late", and too small to offset the supposed damages his own policies would do. Pfotenhauer said, "if this is his prescription for our economy, at a time when we're already ailing, I cannot think of any kind of medicine that could be worse".

"Barack Obama's overall economic policy can be characterized as the Europeanization of the american economy, because it is effectively a high tax, high spending protectionist approach," Pfotenhauer said, "and it doesn't work. All you need to do is look at the economies in say Germany or France, where you have, even in our tough economic time, unemployment rates that are significantly higher, growth rates that are significantly lower, and a quality of life or living that is about a third lower than in the United States." Holtz-Eakin and Pfotenhauer were participating in a conference call on Obama's tax plan, which according to the McCain advisers, includes approximately a trillion dollars of new spending and increased tax credits for Americans that do not pay income taxes.

More secure with McCain

Sen. Richard Burr (R-N.C.) and Doug Holtz-Eakin from Sen. John McCain’s (R-Ariz.) campaign team held a conference call to rebuttal some issues brought up in Sen. Barrack Obama’s (D-Ill.) campaign speech on economic policy held in Raleigh, North Carolina. Burr began by saying that if the American people focus on the campaign rhetoric they will find big differences between what candidates propose and what they have done.

Burr said that about fifty percent of Obama’s speech focused on discrediting McCain rather than on Obama’s actual policy and proposals. While Obama said he wanted to lower tax rates for lower and middle class Americans, in the past he has voted 94 times to raise taxes. Burr explained that McCain has “been bold” in his pledge to keep taxes low and wants to give middle class Americans a tax break.

Burr also said that when looking at all the proposals and histories of both presidential candidates, there is more security with McCain. McCain has the better track record when it comes to committing to his promises. Burr went as far as to say that the speech Obama gave today is one that the American people are “sick and tired of.”

Holtz-Eakin explained that McCain actually voted against the 2005 Energy Policy Act while Obama favored it. This shows that McCain does not support a tax cut for Exxon, one of many false claims made by Obama. McCain does in fact believe that keeping taxes low is important for families, for the economy, and for corporations across America.

Obama Campaign: relieve the squeeze on ordinary Americans

Jason Furman, Sen. Barack Obama’s (D-Ill.) economic policy advisor, along with Austan Goolsbee held a conference call as a preview for Obama’s speech to take place in Raleigh, North Carolina as part of his “Change That Works for You” campaign. The purpose of the call was to contrast the economic proposals of presidential candidates Obama and Sen. John McCain (R-Ariz.).

Goolsbee explained the “economic pinch” that the American population has been feeling due to the jump in the unemployment rate and the rising cost of oil. He said that the dismal state of the economy is a culmination of a failed philosophy of cutting taxes for wealthy Americans without making investments for ordinary citizens.

Furman explained the clear and direct contrasts between Obama and McCain’s economic policies, saying that McCain has no short run stimulus plan and a long run theory that is “flat out false.” While McCain proposes enormous tax cuts, nearly twice as large as President Bush’s current plan, Obama wants to implement a tax relief for ordinary Americans, cutting up to $1,000 worth of taxes and giving direct tax relief to subsidized interest payments, a program which would not increase the economic deficit.

Both Furman and Goolsbee explained Obama’s belief that a short run stimulus is crucial for the American economy. After five consecutive months of job decline, a job stimulus is needed in order to get money into Americans’ pockets.

McCain campaign addresses housing crisis response

Senator John McCain’s (R-AZ) presidential campaign held a conference call today to discuss his recent comments regarding economic policy. Carly Fiorina, RNC Victory 2008 Chair, outlined McCain’s proposals to help homeowners. Specific plans included the Homeowner Program, where “worthy” homeowners could apply for governmental assistance to restructure debt. Fiorina said McCain also called for a Department of Justice task force to investigate lenders and speculators who may have contributed to the housing crisis. McCain also called for the government to stop filling the strategic petroleum reserve in order to alleviate gas and food prices, and he called for a comprehensive reform of the unemployment insurance program.

Some callers expressed opinions that McCain took a more aggressive stance towards the mortgage refinancing than he has in the past, but Fiorina responded that his new policies are consistent with his values and he is most committed to securing a bipartisan solution to the problem. Fiorina also said that McCain’s policy goes further than the Federal Housing Administration’s, with a 10 percent negative equity opportunity as opposed to the FHA’s 3 percent. Fiorina reinforced that McCain’s plan is focused on helping responsible homeowners.