US PRESIDENT Barack Obama will today announce $300 billion (€236 billion) in tax breaks for businesses as part of his campaign to restore the Democratic Party’s flagging fortunes before midterm elections on November 2nd.
Mr Obama will explain the measures at a community college in Cleveland, Ohio, this afternoon. Businesses will be allowed to deduct all investment in new equipment through the end of 2011 from their federal taxes, at an estimated cost of $200 billion.
The White House said Mr Obama will emphasise that it took years to create the economic crisis and “it will take more time than any of us would like to fully repair the damage”. He will say that “there are no silver bullets and anyone who is promising them is not being straight with the American people”.
Republicans have stalled several of Mr Obama’s economic measures in Congress, including a Bill that would give tax breaks to small businesses. To reassure businesses who fear the newest measure will also be blocked, Mr Obama will specify that tax exemptions will be retroactive from today’s date.
The president will also promise to seek a permanent extension of $100 billion in tax credits for research and development. Bill Clinton and George W Bush also supported this. Congress renews the research credit temporarily because of its high cost.
Ohio voted for the winner in the last 12 US presidential elections and is considered a bellwether of opinion. This will be Mr Obama’s 10th visit to Ohio since he took office 20 months ago. New York is the only state he has visited more.
A Gallup poll last week showed the Republicans leading by 51 per cent to 41 per cent for Democrats – the GOP’s largest lead in Gallup’s history of tracking the midterm generic ballot for Congress.
In a poll published yesterday by the Washington Post, 43 per cent of respondents said they have more confidence in the Republicans’ ability to deal with financial problems, compared to 39 per cent for the Democrats. It was the first time in eight years that Republicans have led on the economy.
In further bad news for Mr Obama, a study released yesterday by BofA Merrill Lynch Global Research and Morgan Stanley predicted the 9.6 per cent unemployment rate will approach 10 per cent by the end of the year.
Two months is a long time in politics, and Mr Obama’s supporters hope he will be able to galvanise lethargic Democrats. They took courage from his feisty performance at a Labor Day rally in Milwaukee on Monday afternoon.
“I am going to keep fighting every single day, every single hour, every single minute, to turn this economy around,” the president said. Twice he mocked the House Republican leader John Boehner as “the man who thinks he’s going to be speaker”.
In Milwaukee, Mr Obama announced $50 billion in infrastructure projects over the next six years. “We are going to rebuild 150,000 miles of our roads . . . lay and maintain 4,000 miles of our railways . . . restore 150 miles of runways . . . advance to a next-generation air-traffic control system to reduce travel time and delays.”
The measures announced by Mr Obama this week amount to $350 billion in tax breaks and investments. The White House carefully avoids the word “stimulus”, because last year’s $787 billion stimulus proved unpopular.
The Senate Republican leader Mitch McConnell said in a statement that the “latest plan for another stimulus should be met with justifiable scepticism”. In Milwaukee, Mr Obama portrayed himself as the champion of workers and the middle class against what he called “powerful interests”.
Departing from his prepared remarks, the president said “they’re not always happy with me. They talk about me like a dog.” Congressional Republicans have opposed everything he has tried to do, Mr Obama said. “If I said the sky was blue, they’d say no. If I said fish live in the sea, they’d say no. They just think it’s better to score political points before an election than to solve problems.”
He said Republicans have not renounced “that economic philosophy that they have been peddling for most of the last decade . . . you cut taxes for millionaires and billionaires; you cut all the rules and regulations for special interests; and then you just cut working folks loose . . . to fend for themselves”.