NEW YORK — President Barack Obama said Saturday that the package of proposals that Republicans unveiled last week would repeat the policies that led to the worst recession since the Great Depression and go against the American people’s interests.
Obama used his weekly address on the radio and Internet to take aim at the Republicans’ “Pledge to America” plan that proposes to cut federal spending, extend expiring tax cuts and repeal the health-care overhaul Obama signed into law earlier this year.
“It is grounded in [the] same worn-out philosophy: cut taxes for millionaires and billionaires; cut the rules for Wall Street and the special interests; and cut the middle class loose to fend for itself,” Obama said. “That’s not a prescription for a better future. It’s an echo of a disastrous decade we can’t afford to relive.”
The plan is patterned after the “Contract with America,” which House Republicans promoted in 1994, during former Democratic President Bill Clinton’s first term. Six weeks after that platform was presented, Republicans won enough seats in midterm elections to gain a majority in the House of Representatives for the first time in 40 years.
Today, Republicans are poised to make significant gains in Congress and potentially retake control of the House.
In the Republican address, U.S. Rep. Kevin McCarthy of California defended his party’s new governing agenda, saying it addresses American concerns and “out-of-control” spending.
“I am speaking to you on behalf of Republicans to tell you that we’ve been listening, and we’ve heard you,” McCarthy said. “This pledge isn’t about Republicans or Democrats, liberals or conservatives - it’s about you.”
Obama on Saturday criticized the Republican push to extend tax cuts for the nation’s highest earners that are set to expire at year’s end. Obama has proposed keeping lower rates in place for incomes below $200,000 for individuals and $250,000 for couples filing jointly, which accounts for about 97 percent of taxpayers, according to Internal Revenue Service data.
“For all their talk about reining in spending and getting our deficits under control, they want to borrow another $700 billion, and use it to give tax cuts to millionaires and billionaires,” Obama said. “On average, that’s a tax cut of about $100,000 for millionaires.”
The debate will extend past the November elections and into a lame-duck session ofCongress, as Senate leaders this week postponed floor action on the tax-cut extensions.
Obama reiterated his call for Congress to enact proposals including a permanent extension of a research and development tax credit and additional infrastructure investments.
Meanwhile, former Federal Reserve Chairman Alan Greenspan said in an interview on PBS that it’s more important for the U.S. to cut its budget deficit than to extend tax cuts currently set to expire at the end of this year.
“The budget deficit problem, I believe, is far more dangerous than most of us contemplate on a day-to-day basis,” Greenspan said in an interview broadcast on PBS television’s Newshour.While low interest rates have made it easy for the government to sell bonds, “assuredly they’re not going to stay here.”
House Speaker Nancy Pelosi on Friday said the House may vote in the new week on extending the cuts, many of which were supported by Greenspan in 2001. Greenspan was the Fed chairman from1987 to 2006. At the time the cuts were enacted, the federal government operated with a surplus, and Greenspan told Congress he didn’t think the cuts would lead to a deficit.
While eliminating the tax cuts now “will have a negative impact” on the economy, it will not have a “major” influence, he said.
The choice between lower taxes and higher debt “is a tradeoff between bad and worse.”
Greenspan’s comments came a day after Nassim Nicholas Taleb, a New York University teacher and author of the 2007 best-seller, The Black Swan: The Impact of the Highly Improbable, said Obama and his administration weakened the country’s economy by seeking to foster growth instead of paying down the federal debt.
“Obama did exactly the opposite of what should have been done,” Taleb said Friday in Montreal in a speech as part of Canada’s Salon Speakers series.
“He surrounded himself with people who exacerbated the problem. You have a person who has cancer and instead of removing the cancer, you give him tranquilizers. When you give tranquilizers to a cancer patient, they feel better but the cancer gets worse.”
Today, Taleb said, “total debt is higher than it was in 2008 and unemployment is worse.”
Obama this month proposed a package of $180 billion in business tax breaks and infrastructure outlays to boost spending and job growth.
That would come on top of the $814 billion stimulus measure enacted last year.
The U.S. government’s total outstanding debt is about $13.5 trillion, according to Treasury figures.
Information for this article was contributed by Courtney Schlisserman and Frederic Tomesco of Bloomberg News.
Front Section, Pages 5 on 09/26/2010