Obama Invokes Teddy, Pushes Congress To Pursue Fairness

By Adrianna McGinley

President Obama called on Congress Tuesday to channel the policies of former President Theodore Roosevelt to bring the country out of recession and keep the “American dream” alive for middle-class Americans.

“At the turn of the last century, when a nation of farmers was transitioning to become the world’s industrial giant, we had to decide: would we settle for a country where most of the new railroads and factories were controlled by a few giant monopolies that kept prices high and wages low? Would we allow our citizens and even our children to work ungodly hours in conditions that were unsafe and unsanitary? Would we restrict education to the privileged few? Because some people thought massive inequality and exploitation was just the price of progress,” Obama said during remarks in Osawatomie, Kansas. “Theodore Roosevelt disagreed.”

“He believed then what we know is true today, that the free market is the greatest force for economic progress in human history,” Obama added. “But Roosevelt also knew that the free market has never been a free license to take whatever you want from whoever you can.”

Obama said Roosevelt was called a radical, socialist and communist for his progressive ideas, but reminded his audience that those ideas were what eventually brought the country out of depression. According to Obama, Roosevelt faced the same skepticism that exists today from “a certain crowd in Washington” who claim the market would “take care of everything…if only we cut more regulations and cut more taxes.”

These critics, Obama said, praise the “trickle-down” theory; a theory he believes lacks what the country needs.

“It’s never worked,” he said. “It didn’t work when it was tried in the decade before the Great Depression. It’s not what led to the incredible post-war boom of the 50s and 60s.”

Obama said that a child born into poverty in the years following World War II had a 50 percent chance of reaching the middle class and in 1980 their chance dropped to 40 percent. Today, he said, their chance has fallen to just one in three.

“The idea that those children might not have a chance to climb out of that situation and back into the middle class, no matter how hard they work? That’s inexcusable. It’s wrong. It flies in the face of everything we stand for,” Obama said.

“This isn’t just another political debate. This is the defining issue of our time. This is a make or break moment for the middle class, and all those who are fighting to get into the middle class.”

Obama called on Congress to pass comprehensive, long-term tax reform, consumer protection measures and support for higher education to bring the U.S. back to prosperity.

“In this economy, a higher education is the surest route to the middle class… We shouldn’t be making it harder to afford college, we should be a country where everyone has the chance to go.”

Obama pushed for an extension of the payroll tax and unemployment benefits to aid struggling middle class families immediately but said “we have to rethink our tax system more fundamentally” in the long term.

“We have to ask ourselves: Do we want to make the investments we need in things like education, and research, and high-tech manufacturing? Or do we want to keep in place the tax breaks for the wealthiest Americans in our country? Because we can’t afford to do both. That’s not politics. That’s just math,” Obama said.

The president called out Republicans for continuing to defend the Bush-era tax cuts and criticized his conservative colleagues for refusing to ask millionaires to return to Clinton-era tax rates.

When Clinton proposed tax increases on wealthy Americans, Obama said, there were fears it would “kill jobs and lead to another recession” but instead,  nearly 23 million jobs were created and the deficit was eliminated.

“I’m here to reaffirm my deep conviction that we are greater together than we are on our own,” Obama said. “I believe that this country succeeds when everyone gets a fair shot, when everyone does their fair share, and when everyone plays by the same rules. Those aren’t Democratic or Republican values; 1 percent values or 99 percent values. They’re American values, and we have to reclaim them.”

Bloomberg Urges Super Committee To Go Big, Promotes Higher Taxes For All

By Andrea Salazar

New York City Mayor Michael Bloomberg called on federal lawmakers Tuesday to seriously address the nation’s debt and deficit by allowing the Bush tax cuts to expire.

In a speech at the left-leaning Center for American Progress in Washington, D.C., Bloomberg touted the plan put forth last year by President Obama’s debt commission. The proposal co-crafted by Democrat Erskine Bowles and Republican Alan Simpson, featured large spending cuts, scaled-back tax breaks, increases to personal tax rates and tweaks to federal entitlement programs like Social Security and Medicare.

“The spending cuts in Simpson-Bowles, plus Clinton-era tax rates, plus closing some tax loopholes and ending wasteful subsidies would save $8 trillion and effectively bring our budget into balance by 2021,” Bloomberg said during a speech at the Center for American Progress in Washington.

Bloomberg warned that the current deficit committee’s goal of $1.2 trillion in cuts “would be almost as bad as getting no deal at all.” He called that figure “a drop in the bucket” compared to the nation’s $14.6 trillion debt.

“It will allow Congress to walk away from real deficit reduction until at least 2013.”

Calling for “a flatter and lower” tax, Bloomberg called on President Obama to allow the Bush tax cuts expire for all tax brackets.

“All income groups have to be part of the solution,” Bloomberg said. “It’s fair to ask those who earn more to bear more of the burden. That is the whole idea behind a graduated income tax,” Bloomberg said. “But all of us should help carry the load.”

However, the Mayor, who also happens to be the 12th richest person in the U.S., acknowledged that his recommendations are not a “cure-all,” adding that entitlement, tax and immigration reforms are also necessary.

Addressing the gridlock in Congress, Bloomberg pushed Democrats and Republicans to compromise. “We are not going to be able to cut our ways out of the problem and we’re not going to be able to just tax our ways out of the problem,” he said. “We must do both.”

“All sides have to be willing to give on something,” Bloomberg added. “We don’t have to slaughter the sacred cows but we do need to get a little milk from them.”

Economists Recommend Immediate Action To Stimulate Economy

By Adrianna McGinley

A trio of economists suggested to the Senate Budget Committee Thursday that immediate, stimulative action is necessary to have effective results in reviving the nation’s debilitating economy. 

In his opening remarks, Ranking Member Sen. Jeff Sessions (R-Ala.) criticized President Obama for not presenting Congress with a concrete budget and blasted experts’ claims that spending more will have immediate positive effects on the economy.

“The budget process I don’t think is broken, it’s been abandoned…Why should we continue to trust the, affectionately, I call them, masters of the universe, maybe you three are part of that group, who tell us we can spend and borrow our way to prosperity,” Sessions said. “Why don’t we borrow twice as much? They’ve been wrong, it looks like, from the beginning.”

Dr. Kevin Hassett, Director of Economic Policy Studies at the American Enterprise Institute; Dr. Chad Stone, Chief Economist at the Center on Budget and Policy Priorities; and Dr. Mark Zandi, Chief Economist and Co-Founder of Moody’s Analytics agreed on the need for corporate tax reform and for extending the federal tax holiday, citing it would reduce the fiscal drag in 2012 by half. The trio also agreed that, while it is important to jump start the economy today, legislators must keep long-term goals in mind.

“We need to really play it big now, we need to have fiscal consolidation and fundamental tax reforms that can immediately stimulate the economy but not with policies that give us a hangover two years from now,”  Hassett said.

“If policies makers do nothing, if you do nothing, in 2012 federal fiscal policy will subtract 1.7 percentage points from growth,” Zandi added. “If you throw in state and local government cuts, it gets to 2 percentage points, I don’t think this economy can digest that.”

Sen. Begich (D-Alaska) acknowledged that the solution is in the hands of Congress and they cannot allow political games to get in the way of recovery.

“The responsibility we have as Congress is to actually do something, actually make some decisions that are not going to be easy,” Begich said. “A good example, this highway bill, this FAA bill, which are thousands and thousands of jobs that are sitting on the line because we differ over one or two items, we’re going to throw the whole thing out because we think that’s best for the political fight.”

GDP Up But Economic Future Still Uncertain

By Kyle LaFleur

The Gross Domestic Product rose slightly to two percent according to new third quarter numbers out Friday.  With November’s midterm election less than four days away and the economy being a hot button issue, the increase sent mixed feelings.

“Clearly these numbers are consistent with the story that it would be suicidal to let the Bush tax cuts expire or it would be very painful for the economy if the unemployment benefits aren’t extended during the lame duck session,” said American Enterprise Institute for Public Policy Research (AEI) scholar John Makin.

GDP reports come out midquarter which prompted Makin to warn the public about taking the number as set in stone.

“This report will probably be revised downward.  There is a tendency, there’s been a consistent tendency for the GDP initial prints to be higher then the final print.  Last quarter ended up at a 1.7 percent rate, started out at rate well over two percent,” said Makin.

Makin went on to predict that the fourth quarter GDP number would end up around one percent.

Social Contract Guiding Obama's Economic Efforts, Says Biden Adviser

By Kyle LaFleur

The social contract in the wake of the United States’ economic recession was the focus of an address given on Tuesday by Jared Bernstein, the top economic advisor to Vice President Joe Biden.

The social contract, according to Bernstein, is “a consensus wherein the majority agrees to abide by a set of rules. They agree because absent these rules, they and their property and their family would be in danger.” 

“I view the great recession as the outcome of a failed social contract,” he added.

Bernstein, who has authored two books on economic issues facing middle-class Americans, argued that there are two types of social contract systems: The first, he said, is ‘YOYO’ (you’re on your own), which he claimed is weaker and reliant upon privatization and defunding of government regulations. The second he said, is ‘WITT’ (we are in this together), which he described as a broader social contract and the path being used by the Obama administration to restore the country’s economic balance.

On other issues, Bernstein credited the 2009 Recovery Act with helping stabilize the nation’s economy, but warned that it will take time for all the benefits of the legislation to be realized.

“The fact that you’ve turned around only means you’re moving in the right direction, it doesn’t mean you’ve arrived at your destination,” he said. “Families are clearly still struggling and we need to do all we can to build on the existing momentum, something the President and our economic team continue to focus on every day.”