Lee Spieckerman Rejoinder to President Obama’s Weekly Address; June 16, 2012

(Spieckerman comments in bold)

PRESIDENT BARACK OBAMA: Over the last few weeks, I’ve been talking a lot about America’s economic future.

No, actually, you’ve been talking a lot about America’s economic past, blaming our catastrophic situation on previous Presidents instead of your ruinous policies. Your only “plan” for the future is an additional $6 trillion in federal government debt over the next decade vis-à-vis the Romney plan, more federal money to prop-up bloated blue state government budgets and fund Solyndra-like "Green Energy" schemes and more regulatory strangulation. What a wonderful prescription for economic growth!

I’ve told you how I believe we should go about creating strong, sustained growth; how we should pay down our long-term debt in a balanced way; and most of all, what we should do right now to create good, middle-class jobs, so people who work hard can get ahead.

Middle income households have $4,000 less in income each year than when you took office; their wealth has eroded nearly 40%.  We're in the midst of the longest stretch of 8%+ unemployment since World War II.  The African American unemployment  rate is nearly 15%.  53% of bachelors degree holders under the age of 25 are currently jobless or unemployed, the highest share in more than a decade. The only “class” that has benefitted from your policies has been the governing class. Federal employees' average compensation has grown to more than double what private sector workers earn.  The most robust housing market in America is the Washington, DC suburbs, where the politicians, bureaucrats and lobbyists live.

This isn’t some abstract debate or trivial argument.

It certainly isn’t, which makes your continued push for thoroughly discredited ideas and incessant attempts to incite envy and resentment all the more appalling.

I’ve said that this is the defining issue of our time, and I mean it.

Do you “mean it,” like you did when you said there aren’t red states and blue states, only the United States? Or when you promised to cut the federal deficit in half by the end of your first term? Or when you said that if you haven’t turned this economy around by the end of your third year in office, “this will be a one-term proposition”?

I’ve said that this is a make-or-break moment for the middle class, and I believe it.

You bet it is. That’s why we can’t afford to allow your wild spending, lack of accountability and anti-American energy, anti-jobs policies to continue.

The decisions we make over the next few years will have an enormous impact on the country we live in, and the one we pass on to our children.

Over the next few years? How about the disastrous decisions your administration has already made – adding 50% to our national debt; five trillion dollars; ramming through a health care bill that has made 75% of small businesses reluctant to hire; killing the Keystone Pipeline, depriving us of thousands of good-paying jobs; cutting oil exploration permits on federal lands by half and oil production on those lands by 20%, threatening our children’s energy security? Why should voters trust you to make any more decisions?

Right now, we’re still fighting our way back from the worst economic crisis since the Great Depression.

Another oft-repeated ObaMyth.  '08 was the worst FINANCIAL crisis since the Great Depression, but President Reagan was confronted with the worst ECONOMIC crisis - unemployment that peaked nearly a full percentage point higher than under this recession COMBINED WITH double-digit interest rates and double-digit inflation.

However, if we keep “fighting” with the same ill-conceived policies that we’ve been pursuing under this administration, our economic crisis could easily become the worst since the Great Depression.

The economy is growing again, but it’s not growing fast enough. Our businesses have created 4.3 million new jobs over the last 27 months, but we’re not creating them fast enough.

“Not growing fast enough”? A rare Obama Administration understatement. By the standard of every economic recovery since World War II, we should have created at least five million jobs over the past 27 months.

Despite the economic maelstrom President Reagan faced, by the time he’d been office as long as has President Obama, America was adding four times as many jobs each month as we have under Pres. Obama and economic growth was three times as fast.

The difference? Reagan, with a Democrat-controlled House (unlike this President, Reagan's party never controlled both houses of Congress), implemented low tax, pro-growth, deregulatory economic policies and celebrated American business and business people – while this administration has continually castigated them.  Under President Obama, we've had the fewest new business startups in 30 years.

And we’re facing some pretty serious headwinds – from the effects of the recent spike in gas prices, to the financial crisis in Europe.

Yes, gasoline does cost nearly twice as much per gallon as when you took office, despite the recent downtrend. Oil and gasoline prices are driven by the futures market, which is based on projected supplies months and years hence. This administration’s anti-American energy policies combined with its feckless dealing with Iran has added a significant “fear premium” into petroleum prices. Given America’s prodigious energy production capacity, this is inexcusable.

So far, there are no U.S. economic "headwinds" associated with Europe - quite the contrary.  Over the past three years, U.S. exports to Europe have actually increased (one of the few economic bright spots we have). While the international banking system can certainly cause financial crisis contagion, barring a severe financial implosion in Europe, it is unlikely that the U.S. financial system or economy will be significantly impaired. In fact, investors in European nations are flocking to invest in the U.S., which they see as a safe harbor in the international financial storm. With the right economic policies, we could benefit mightily from this increased external investment.

However, the sovereign debt crisis in many European countries is a harbinger of what will happen here in the U.S. if President Obama is re-elected.

But here’s the thing. We have the answers to these problems. We have plenty of big ideas and technical solutions from both sides of the aisle. That’s not what’s holding us back. What’s holding us back is a stalemate in Washington.

A “stalemate” that commenced when, during your first meeting with Congressional Republicans in 2009, you made the statesmanlike comment to Republican Leader Cantor, “We won. You lost.” That "spirit of compromise" continued when your nearly trillion-dollar “economic stimulus” (which turned out to be a sedative) and horrendous health care bill were arrogantly enacted with no Republican support. Not one “big idea” that didn’t include expanding government or emanate from a Democratic interest group or liberal economist has been adopted by this President. Even the thoughtful budget-balancing plan put forth by the bipartisan Simpson-Bowles commission you created was completely ignored.

Last September, I sent Congress a jobs bill full of the kinds of bipartisan ideas that could have put over a million Americans back to work and helped bolster our economy against outside shocks.

As noted previously, the greatest “shocks” to our economy have not been from  the outside but from your administration. The few economic policy ideas you proposed that weren't completely loony (payroll tax holiday, extending Bush tax rates, a couple of free trade agreements, etc.) were enacted with broad Republican support. The truly dangerous, wasteful ones were, blessedly, stopped by the Republicans.

This administration has been engaged in an unrelenting War on Workers – unleashing a decidedly anti-energy EPA on the coal and natural gas industries and a labor union-controlled NLRB against one of America’s most successful and important exporters, Boeing and other businesses; forcing through Obamacare, which has demonstrably diminished hiring and promising to increase taxes on investors and employers.

A just-released Heritage Foundation analysis shows that the Obama-ballyhooed auto industry bail-out cost taxpayers over $25 billion more than it would have with the kind of “managed bankruptcy with government funding” Gov. Romney proposed. Not one single existing UAW worker was forced to take a pay cut. Meanwhile, thousands of non-UAW blue collar and white collar workers were sacrificed. Chrysler bondholders (primarily pension funds for middle income workers) got nothing – while UAW-controlled pension funds were topped-out with government funds.

Even Obama’s own “car czar,” Steve Rattner, admits that the Obama Administration was far too generous to his UAW friends.

By the way, the $25 billion taxpayers overpaid for the auto bail-out is enough to build the entire remaining border fence with Mexico (at $15mm per mile). Not only would this greatly reduce illegal immigration and increase national security – it would be the very kind of “job creating infrastructure” the President so fervently advocates and provide the essential political predicate to make comprehensive immigration reform possible.

I sent them a plan that would have reduced our deficit by $4 trillion in a balanced way that pays for the investments

This illusory “deficit reduction” is in comparison to the trajectory of the grossly inflated federal budget enacted when the Democrats controlled both houses of Congress in ’09 and is riddled with accounting gimmicks.  It does nothing to reduce the looming explosion in entitlement spending, dangerously diminishes U.S. national defense and massively increases taxes under the current atrocious income tax system instead of radically reforming it.

we need by cutting unnecessary spending

You bet we need to cut unnecessary spending – and, as demonstrated by the GSA scandal, billions blown on Crony-Capitalist “green energy” companies and an abject failure to even consider the Simpson-Bowles Commission recommendations, this is NOT the President who will get it done.

and asking the wealthiest Americans to pay a little bit more in taxes.

Beyond the fact that even left-wing economists acknowledge that raising taxes on higher income Americans would be a drop in the ocean when it comes to reducing our deficit and debt, it would also be enormously detrimental to middle income Americans.

First, higher capital gains taxes would reduce after-tax income on investments, encouraging investors to seek lower-risk investment options instead of the young, growing companies that create the most new jobs and are the vehicle that is most responsible for enabling “average folks” to become prosperous.

Secondly, if tax rates are raised on CEOs, movie stars and top pro athletes (all of whom benefit from the savviest of financial advice and have enormous economic power), they will simply demand a “gross-up” in their compensation to offset the higher tax rates. Where will those extra dollars to pay these “big shots” come from? Pay and benefits for those lower on the pay scale. Thus, “The Buffett Rule” will have exactly the opposite effect of what’s intended (as is almost always the case with attempts to legislate “fairness”).

The most “unfair” part of our income tax system isn’t tax rates (the top 1% of earners already pay 40% of all income taxes; the top 10%, nearly 90% - while the bottom 50% pay no income taxes) but the tax law itself. The wealthy and big business have the money to pay lobbyists to ensure that the tax code will be advantageous to them – and to pay lawyers and accounts to then minimize their taxes under that system. The vastly simplified tax system with lower rates proposed by Gov. Romney would do more to “level the playing field” on taxes than anything else – and free up billions now spent on tax lobbying and compliance, which would be reallocated to investments in businesses that innovate and create productive jobs.

If Romney is smart, he’ll say, “Under my plan, we’ll get MORE taxes from the rich – and have a system that, at long last, is fair and understandable for everyone else!”

Since then, Congress has passed a few parts of that jobs bill, like a tax cut that's allowing working Americans to keep more of your paycheck every week. But on most of the ideas that would create jobs and grow our economy, Republicans in Congress haven’t lifted a finger.

The Democrat-controlled Senate hasn’t “lifted a finger” to even pass a budget in over three years! The President’s budget was voted-down 99-0. How can any employer or investor have the confidence to risk more hiring in the midst of this alarming and unrelenting governmental malpractice?

They’d rather wait until after the election in November. Just this past week, one of them said, “Why not wait for the reinforcements?” That’s a quote. And you can bet plenty of his colleagues are thinking the same thing. I think that’s wrong. This isn’t about who wins or loses in Washington. This is about your jobs, your paychecks, your children’s future. There’s no excuse for Congress to stand by and do nothing while so many families are struggling. None.

President Obama has hosted 150 campaign fundraisers for fat-cats - more than his three predecessors combined.  If Mr. Obama had only spent 75 of those days with his sleeves rolled-up, working with Congress LBJ-style - leading, instead of blaming - imagine what might have been accomplished.

Clearly, given the above-described failures of this administration to encourage job creation and reduce government spending, we need a new team to get it done. While unfortunate that we’ll have to wait until January of 2013, far better than allowing this maladroit governance to continue another four years. Then it really will be too late.

Right now, Congress should pass a bill to help states put thousands of teachers, firefighters and police officers back on the job.

I have a better idea. Instead of shoveling even more borrowed federal dollars to spendthrift state governments like California and Illinois, force states to lay-off unneeded bureaucrats and bad teachers and keep the firefighters, police officers and good teachers.

They should have passed a bill a long time ago to put thousands of construction workers back to work rebuilding our roads and bridges and runways.

Really? Then why did your nearly trillion-dollar “economic stimulus” only spend SIX CENTS of EVERY DOLLAR on infrastructure? Again, a much larger percentage was spent propping-up bloated blue state government budgets to preserve the jobs and rich benefits of unionized bureaucrats. And Keystone was a huge energy infrastructure project that would have yielded tens-of-thousands of high-paying jobs, without costing taxpayers a penny, but was deliberately stopped by this administration.

If the President simply followed the common sense advice of economists and business people aligned with both political parties, it would allow the $1.6 trillion corporations have parked overseas to be brought back to the U.S. with a one-time tax of 5%. If only half of those overseas profits were repatriated - $800 billion - it would generate $40 billion in government revenue – enough to fund the “infrastructure” portion of the President’s new jobs bill without increasing anyone's tax rates.

And instead of just talking about job creators, they should give small-business owners a tax break for hiring more workers and paying them higher wages.

Unfortunately, the President’s total lack of experience in the private sector precludes him from understanding that no company hires a new employee based on a short-term tax incentive. Unlike politicians, businesses think years in advance, not just to the next election.

As noted previously, Obamacare, alone, has caused 75% of small businesses to limit hiring. Unrelenting anti-business rhetoric and policies, out-of-control government spending and looming tax increases have further sapped confidence among all businesses and investors.

This President's War on Workers hasn’t hurt the movie stars, hedge-funders and Wall Street bankers Mr. Obama continues to court and garner donations from – but it’s been a tragedy for America’s workers and entrepreneurs.

A late 2010 major IMF study of the impact of alternative government economic policies around the world concludes that a commitment to “consolidation” (reducing government spending) actually INCREASES private sector economic activity by instilling confidence – and that reductions in government spending are much less contractionary than are increases in taxes. Furthermore, the study finds that infrastructure spending (the part that Obama only devoted six cents of every dollar to in his “stimulus” bill) is, economically speaking, the most beneficial governmental outlay.

Right now, Congress should give every responsible homeowner the opportunity to save an average of $3,000 a year by refinancing their mortgage.

Having witnessed the failure of every one of its programs designed to staunch the housing market's hemorrhaging, one would think this administration might try something new. The biggest problem with the housing market is underwater mortgagees walking away from their homes and unemployed homeowners being unable to pay their mortgages. A $3,000/year refi saving will not begin to address those issues. Housing prices are a function of incomes which are based on JOBS. The area where this President has been most woefully deficient.

They should extend tax credits for clean energy manufacturers so we don’t walk away from 40,000 good jobs.

Perhaps if ALL current tax rates were extended (as that right-wing extremist, tool-of-the-rich Bill Clinton suggested before he was forced to recant his heresy), these credits could be included, pending a complete overhaul of our egregious tax system.

And instead of giving tax breaks to companies who ship jobs overseas, Congress should take that money and use it to cover moving expenses for companies that are bringing jobs back to America. There’s no reason to wait.

Wow, covering moving expenses – now that’s what I call a visionary, ambitious policy proposal. A few more big ideas like that and we’ll be out of this economic malaise in no time!

Every problem we face is within our power to solve. What’s lacking is our politics. Remind your Members of Congress why you sent them to Washington in the first place. Tell them to stop worrying about the next election and start worrying about the next generation.

Yes, Obama’s uplifting “We won. You lost.” political paradigm – if only all of Congress would get on-board! The Republican members of Congress that have prevented even more economic damage from being inflicted on our country have certainly done what they were sent to Washington to do!

I’m ready to work with anyone – Republican, Democrat, or Independent – who is serious about moving this country forward. And I hope Members of Congress will join me.

Given the deliberately partisan manner in which Pres. Obama has chosen to govern, this comment would be laughable if our nation’s situation wasn’t so dire. Regrettably, Mr. President, that ship has sailed.

Thanks, and have a great weekend.

If spending your weekend in a futile search for a job or a sufficiently well-paying job – or fretting about the future – constitutes a “great weekend,” we most assuredly will.