On January 1st, taxpayers will see a heavy tax increase, which some are calling “Taxmageddon.” This significant contraction could have negative effects on our economy. In fact, the Congressional Budget Office (CBO) said last week that raising taxes would send the economy back into a recession. And now even former President Bill Clinton says that the tax cuts should be extended, at least temporarily:
Former President Bill Clinton on Tuesday jumped into the debate over how to handle the looming expiration of historically low tax rates paid by nearly every American, putting him somewhat at odds with fellow Democratic President Barack Obama.
Clinton, speaking on the cable television program CNBC, said Congress may have to temporarily extend all of the low tax rates that expire at the end of the year to give lawmakers more time to come up with a plan to cut deficits.
The remarks came as the Obama campaign was trying to raise doubts about Romney’s record in the private sector.
The tax cuts were first put in place under former President George W. Bush. Obama extended the rates for two years at the end of 2010, after Democrats suffered huge losses in congressional elections.
Now, Obama and Democrats want to let some of the lower tax rates expire for the wealthiest Americans. Clinton’s comments could undercut that position.
“They will probably have to put everything off until early next year,” Clinton said on Tuesday.
On Friday, the latest jobs numbers were rolled out from the Bureau of Labor Statistics. As you might have read, the economy created 120,000 jobs in March, well below consensus estimates; though the unemployment rate did fall to 8.2%.
But with the election on the way, we can expect a renewed debate on stimulus spending. And as James Pethokoukis notes, the unemployment rate is far above that the Obama Administration claimed it would be at this point with the 2009 stimulus bill:
Swing and a miss. A big miss. A really big miss. U.S. employers added just 120,000 jobs last month, the Labor Department said on Friday. That’s the smallest increase since October. Economists polled by Reuters had expected nonfarm employment to increase by 203,000. And as economist Robert Brusca points out, “The strong amazing run in household jobs came to a crashing halt as employment in that survey fell by 31,000 after rising by 42,000 last month and 847,000 the month before that.”
Last month’s jobs numbers were certainly much needed good news, but a new report reminds us that we aren’t out of the woods yet. According to a new survey from Gallup, unemployment is hovering back around 9%:
Unemployment could rise back to 9 percent of the U.S. population in Feburary, according to a Gallup survey released Tuesday, painting a grim picture for the Obama administration, which had been temporarily buoyed by promising jobs figures at the end of January.
Gallup’s mid-month reading, which traditionally previews the government report issued at the end of the month, shows a rise of seven-tenths of a percentage from the 8.3 percent unemployment rate at the end of January. That would be the worst unemployment figure since September of last year.
The survey firm said seasonal factors — including job loss by seasonal workers hired over the holidays — could be responsible for the dip.
“Regardless of what the government reports, Gallup’s unemployment and underemployment measures show a sharp deterioration in job market conditions since mid-January,” the firm said in a statement accompanying the release of the data.
Gallup also found that 10 percent of American workers have part-time positions despite wanting full-time work.
This is a reminder to Democrats that they can’t take a month or two of decent economic news as a sign that Barack Obama will win re-election and they’ll re-take the House. Then again, this isn’t surprising given the predictions the Federal Reserve and the Congressional Budget Office recently made about the economy in the next couple of years.
The Bureau of Labor Statistics released the jobs report for last month, which on the surface looks like a positive; in that the economy added 120,000 jobs and the unemployment rate decreased to 8.6%:
Job creation remained weak in the U.S. during November, with just 120,000 new positions created, though the unemployment rate slid to 8.6 percent, a government report showed Friday.
The rate fell from the previous month’s 9.0 percent, a move which in part reflected a drop in those looking for jobs. The participation rate dropped to 64 percent, from 64.2 percent in October.
The actual employment level increased by 278,000. The total amount of those without a job fell to 13.3 million.
The measure some refer to as the “real” unemployment rate, which counts discouraged workers, also took a steep fall to 15.6 percent from 16.2 percent, its lowest level since March 2009.
The growth for November is right around what is needed to keep up with population growth, and numbers for October were revised upward to over 200,000 jobs. So this is very good news, right? That depends on how far into the numbers you go. On the surface a 8.6% unemployment rate is welcome news comparatively speaking.
However, the report notes that some 315,000 umemployed people got out of the job market. As Conn Carroll notes, the “jobless rate counts only people who are actively looking for work.” So when you remove a chunk of people from the number of the unemployed — again, not because they found work, the umeployment rate will only go down. That’s basic math, but it won’t be the lede in many stories.
The Congressional Black Caucus admits that they’re doing things differently because Obama is in the White House than if someone else, like even Bill Clinton, were sitting there. I picked it up in a piece over at The Hill.
Unhappy members of the Congressional Black Caucus “probably would be marching on the White House” if Obama were not president, according to CBC Chairman Rep. Emanuel Cleaver (D-Mo.).
“If [former President] Bill Clinton had been in the White House and had failed to address this problem, we probably would be marching on the White House,” Cleaver told “The Miami Herald” in comments published Sunday. “There is a less-volatile reaction in the CBC because nobody wants to do anything that would empower the people who hate the president.”
In this instance, the problem is the unemployment rate for African-Americans that is still moving upwards. Members of the caucus want action, but don’t want to undermine the president.
“We’re supportive of the president, but we getting tired, y’all,” Rep. Maxine Waters (D-Calif.) said in August. “We want to give [Obama] every opportunity, but our people are hurting. The unemployment is unconscionable. We don’t know what the strategy is.”
The thing that bugs me is that, if by their own admission they’re treating Obama different, aren’t they simply doing the exact same thing they would criticize others for? After all, they’re giving preferential treatment to Obama because of his skin color. How is this not racism?
It looks like Americans aren’t buying President Barack Obama’s latest stimulus gimmick — which includes more than $460 billion in tax hikes, according to a new poll from Bloomberg:
By a margin of 51 percent to 40 percent, Americans doubt the package of tax cuts and spending proposals intended to jumpstart job creation that Obama submitted to Congress this week will bring down the 9.1 percent jobless rate. That sentiment undermines one of the core arguments the president is making on the job act’s behalf in a nationwide campaign to build public support.
Compounding Obama’s challenge is that 56 percent of independents, whom the president won in 2008 and will need to win in 2012, are skeptical it will work.
In all of the categories gauging Obama’s performance on economic issues, the president’s disapproval rating among independents is above 50 percent.
That’s not the end of Obama’s troubles. The poll also shows that 62% of Americans disapprove of his handling of the economy. Only 33% of respondents approve (one has to wonder what world their living in). Overall, Obama’s job approval rating stands at 45%.
Since the bill has a lot of opposition already in Congress, many observers say that it serves only one real purpose; to have another fight between the White House and Republicans over the economy. That may very well be the case, but the numbers are already against Obama on this. Republicans really need only point to the failed 2009 stimulus bill as evidence that Obama is throwing a Hail Mary.
The jobs report for the month of August was released just a few minutes ago by the Bureau of Labor Statistics. The news isn’t encouraging:
The US economy created no jobs and the unemployment rate held steadily higher at 9.1 percent in August, fueling concerns that the US is heading for another recession.
It was the first time since World War II that the economy had a net zero jobs created for a month.
Economists had been expecting the report to show a net of 75,000 jobs created, an unusually low number considering the US is technically more than two years removed from the end of the last crisis.
Keep in mind that the employers need to produce around 130,000 jobs just to keep up with population growth, so even the estimates for this month were anemic. The silver lining is, as noted, the unemployment rate didn’t go up.
The report puts even more pressure on President Barack Obama to deliver a strong proposal to Congress to encourage job creation, especially after his stunt of trying to upstage the GOP presidential debate. Odd are, however, that he’ll resort to the same policies that have held the economy back.
Gallup recently released numbers showing President Barack Obama’s ever-falling approval ratings on the economy. Yeah, it’s is a few days old, but it underlines a big bump in the road to President Obama’s re-election.
Obama’s approval rating on “creating jobs” is 29/65 and the “federal budget deficit” has an even larger gap that his approval rating on the economy at 25/71 (remember that time he said we’d have a net spending cut during his first term?). These are big problems for Obama since economic forecasts for the next two years predict slow growth and unemployment to remain at roughly the same level. Obviously, that’s not a position that any incumbent wants to run on.
Not unlike what the Federal Reserve did last week, Moody’s Analytics has lowered the United States’ short-term economic prospects:
Moody’s Analytics, a sister company to credit-ratings company Moody’s Investors Service, now expects real gross domestic product to increase at an annualized rate of about 2% in the second half of this year and just over 3% next year, compared with its estimate a month ago for growth of 3.5% for the second half of this year and through 2012.
The firm attributes most of the expected decline to a loss of business, investor and consumer confidence, noting the economy’s improving fundamentals such as the strengthening of business’s balance sheets and consumers’ strides in cutting household debt.
The credit-rating company also said it thinks the odds of a renewed recession over the next 12 months — now at 1 in 3 — will increase if stock prices continue to fall. Moody’s maintains that the odds of a renewed recession rise with each 100-point drop in the Dow Jones Industrial Average. While Moody’s expects the economic recovery will continue, prospects for economic growth and job creation have “diminished substantially.”
Though the U.S. economic recovery looked healthy at the beginning of the year, a series of events have hurt business, consumer and investor confidence, Moody’s said. These include surging prices for food and gasoline, natural disasters in Japan, Europe’s debt crisis and, most recently, the U.S. debt woes.
Tim Pawlenty’s struggling campaign put out one of the better ads I’ve seen, although I’m not sure where he is running it since he recently pulled all his ads in Iowa ahead of the Ames Straw Poll. It’s called “Experience Matters” it hits Obama on his lack of leadership, the economy and the S&P downgrade; among other things.
Seriously, this election needs to be won on the economy. If the eventual GOP nominee focused solely on jobs and the economy with unemployment still over 9% instead of wedge issues, they really could win next year.