Is GOP trying to sabotage economy to hurt Obama?

WASHINGTON — Are Republican lawmakers deliberately stalling the economic recovery to hurt President Barack Obama's re-election chances? Some top Democrats say yes, pointing to GOP stances on the debt limit and other issues that they claim are causing unnecessary economic anxiety and retarding growth.

The latest Democratic complaint came after House Speaker John Boehner said Tuesday that when Congress raises the nation's borrowing cap in early 2013, he will again insist on big spending cuts to offset the increase. Boehner, R-Ohio, continues to reject higher tax rates, which Democrats demand from the wealthy.

That led Sen. Chuck Schumer, D-N.Y., to say Boehner is virtually assuring another debt-ceiling crisis as bad or worse than the one that shook financial markets nine months ago.

"The last thing the country needs is a rerun of last summer's debacle that nearly brought down our economy," Schumer said in a statement. In an interview, Schumer added: "I hope that the speaker is not doing this because he doesn't want to see the economy improve, because what he said will certainly rattle the markets."

Boehner responded in a statement: "Republicans have passed nearly 30 bills that would help small businesses create jobs and we are waiting on Senate Democrats to vote on these common-sense measures. The failure to act on these jobs bills, as well as our crushing debt burden, is undermining economic growth and job creation."

Democrats say Republicans loaded their jobs bills with provisions certain to doom them in the Senate, such as restrictions on unions and on regulatory agencies such as the Environmental Protection Agency.

Regardless of whether Schumer's suspicions are right, there's evidence that unceasing partisan gridlock and the prospect of big tax increases and spending cuts in January are causing some companies to postpone expansions. Even small economic slowdowns are bad news for Obama, who is seeking re-election amid high unemployment.

The Washington Post this past week compiled a list of military contractors, hospitals and universities that are delaying hires and bracing for cuts, partly because of fears that Washington's partisan divisions will not abate.

The most obvious showdown will happen soon after the Nov. 6 election. Unless a lame-duck Congress can make deals, the economy will suffer a double whammy of large tax increases and spending cuts, starting Jan. 1. The tax increases would hit virtually every working American and the spending cuts would affect military and domestic programs.

Economists say that what Federal Reserve chairman Ben Bernanke calls a "fiscal cliff" could possibly lead to another severe recession.

On top of that, perhaps by late January or so, Congress and the president — be it Obama or Republican Mitt Romney — will again confront the need to raise the country's borrowing limit or else trigger a first-ever government failure to pay its debts. A partisan showdown over this issue last summer led to a downgrade in the nation's credit worthiness and a sharp stock market drop.

These crucial decisions will occur after the presidential election. But investors, planners and business owners make decisions about hiring, expansion and investments months in advance. The more they worry about a serious economic downturn in nine months or so, the more reluctant they are to expand operations and hire workers now.

"All that uncertainty has us cautious, and we're scaling back our hiring expectations," said Eric Remington, vice president of Kaman Corp., which recently canceled plans to hire 200 new workers at a defense aerospace plant in Jacksonville, Fla.

"The law is, the automatic cuts will take effect on Jan. 1," he said. "Everyone says, 'Don't worry, that won't happen.' But we've got a business to run, and we've got to plan."

Schumer and other top Democrats have said for months that GOP lawmakers may be trying to strangle the economic recovery for political reasons.

"Their strategy is to suffocate the economy for the sake of what they think will be a political victory," Obama's campaign manager, Jim Messina, wrote in an email to supporters last October, when Congress was debating a jobs bill.

Senate Majority Leader Harry Reid, D-Nev., said his Republican counterpart was not cooperating on that legislation "in hopes that he can get my job, perhaps."

Maryland Gov. Martin O'Malley, chairman of the Democratic Governors Association, told The Associated Press last year that some GOP lawmakers, "through their intransigence, cleverly set up a situation for America's economy to fail, either by needlessly driving us to default, or needlessly driving us into massive public-sector layoffs."

Federal, state and local government layoffs have been under way for months. They may be necessary to reduce deficits and survive recessions. But they increase unemployment, a problem for any president seeking a second term.

Since February 2010, when the economy began consistently adding jobs, the private sector has gained 4.2 million positions. But federal, state and local governments during that time have cut more than 500,000 jobs.

House Democratic leader Nancy Pelosi of California did not ascribe partisan motives to Boehner's latest warnings about the next debt ceiling showdown. But she said he may be unnecessarily hurting the economy. "It already can be damaging, just the fact that it's brought up," Pelosi told reporters Thursday.

Republicans say it's absurd to make such an accusation. They point to bipartisan efforts to pass jobs-creation bills, trade pacts and, after some arguments, an extension of the payroll tax cut that Obama originally had proposed for only one year.

GOP lawmakers want Congress to act this year to ensure that none of the Bush-era income tax cuts will expire, as scheduled, on Jan. 1. Such assurance, they say, could lead investors and business owners to start expanding and hiring now.

Democrats say the move, by itself, would increase the deficit dramatically. They want to end the tax cuts for the wealthiest and they note that the economy boomed during Bill Clinton's presidency, before the big tax cuts of 2001 and 2003 were enacted.

Boehner's aides say the speaker supports tax law changes, including eliminating some loopholes and exemptions, that could result in greater revenue even if rates remain the same or are reduced.

As for the debt limit, "allowing America to default would be irresponsible," Boehner said Tuesday at an economic forum. "But it would be more irresponsible to raise the debt ceiling without taking dramatic steps to reduce spending and reform the budget process."

Democrats say that's precisely the type of economic saber-rattling that can frighten investors and employers, and damage Obama's re-election hopes. Boehner disagrees.

"I said that we should not wait until the 11th hour to address these issues," Boehner told reporters Thursday. "The only ones who are talking about drama or brinksmanship are my Democrat colleagues."

The danger of another credit-rating downgrade "comes from continued inaction on the deficit, and our piling debt," he said, not from "calls for action."

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 's picture

Ronald Riml, you forgot to

Ronald Riml, you forgot to mention gas. It was 1.89 a gallon when Obama took office.

RONALD RIML's picture

Bob - You forget 'Gas' is a World Market - billions of consumers

Based upon our 'Income" we have some of the cheapest gas in the world.

"The cost of a gallon of gasoline ranks with bad weather as one of the most universal complaints. In the U.S., the price of gas is getting even more attention than usual this year as presidential contenders battle over energy policy.

See -

What's lost in the debate is how much the U.S. and other countries actually pay for gas, relative to one another and to their citizens' wages. The following ranking sorts 55 countries by average price at the pump and by "pain at the pump," which is measured by the percentage of average daily income needed to buy a gallon of fuel."

And see -

"The world’s cheapest gas is found in Venezuela at $0.09 per gallon (cheaper than bottled water), where the cost of filling up the 39-gallon tank of a Chevrolet Suburban is only $3.51, compared with $163.41 in the U.S. The most expensive gas among these countries is India, based on the “pain at the pump” measure. A gallon of gas costs $6.06 in India, which is about 100% of per-capita daily income (based on annual per-capita GDP of $1,400). If gas was that expensive in the U.S., it would cost about $200 per gallon (based on annual per-capita GDP of $48,387). So even at $4 per gallon, gasoline here is a real bargain.
Based on the price of gas relative to income, the U.S. ranked No. 50 out of 55 countries for the “pain at the pump” measure, and that was based on gas prices at their peak in the U.S. in early April. Now that U.S. prices have fallen by almost 20 cents in the last six weeks, the “pain at the pump” has eased somewhat – so quit your whining about “high” gas prices! Relative to income, we have some of the cheapest gas in the world."

Steve Bulger's picture


The GOP doesn't have to sabotage the economy; Obama and his leftist, liberal, progressive friends are doing a good job of it already.

RONALD RIML's picture

Truth is going to hurt you, Steve.....

Talk Radio News Service

WASHINGTON – In January 2009, before President Obama took the oath of office, annual spending was set to total 24.9% of GDP. Total spending fiscal year 2012 is expected to top out at 23.4% of GDP.

Taxes today are lower than on inauguration day. In January 2009, the Congressional Budget Office projected that total federal tax revenue that year would amount to 16.5% of GDP. This year? 15.8%.

The deficit this year will be lower than on the day Obama took office. CBO said the 2009 deficit would be 8.3% of GDP. This year’s deficit is expected to come in at 7.6%

- Also - The Dow Jones Industrial Average closed at 7,949 on Jan. 20, 2009, the day Obama took office, and is now 12,369 - a 55% increase.

Appears he really sabotaged the economy there, eh...... (To a partisan prevaricator, he did)

 's picture

There must be a happy medium

The austerity/taxes angle has failed Europe miserably. The EU is in more trouble now than it was when the global meltdown started, and now Republicans and Democrats want to enact the same types of measures here.
The Democrats want to raise more money through taxes, which takes away money that could be spent to bolster the economy but don't want to make cuts to services. The Republicans want to cut taxes and services with no guarantee that the money saved would be used to do anything but line the pockets of the rich.
You cannot combine extreme austerity measures and extreme increased taxes at the same time or we wind up being Greece. Reasonable service cuts combined with reasonable tax increases are the only answer to the problem but therein lies the problem...That "reasonable" part.
We no longer have reasonable representatives in office. They are all partisan idiots who are looking out for themselves and their next election bid. We are doomed unless people start realizing that, and stop hoping for elected idiots to solve our problems.

Dan Beggs's picture

Obama lies

says one thing does another. shipping guns to mexican drug cartels, having the EPA force over regulation that shuts down business. Forcing tombstone Ariz to ration water because they wont let them repair the aqua duct in a national forest. the senate needs to be cleaned out and filled with real patriots not millionares. obama wants us all on the public assistance so he can control us and tell us how to live. we need a limited govt,not a nanny state

 's picture

Why is this story on Page One?

I thought page one was reserved for news strories? This is obviously a lamestream media opinion piece by people in the bag for Obama. If you are going to run this tripe on page one, this reader would appreciate an opinion disclosure at the top of the story.

Obama has spent $5 trillion in his first 3.5 years in office. I shudder to think of another 4 years for this character with the composite girlfriends.

 's picture

it's all they have

"Is GOP trying to sabotage economy to hurt Obama?" Yes. It's all about power for power's sake.

 's picture

Obama one term President is

Obama one term President is their mantra from day one and they have done all that they could to try and make that happen.

Their lust for power before country is their mind set.

GARY SAVARD's picture

Obviously, we can't keep

Obviously, we can't keep raising the debt ceiling year after year or keep raising taxes on anyone defined as "rich" in order to keep all the money flowing to Washington so our politicians can squander it as they see fit. We need leaders on both sides of the aisle to come together and fix this mess, and right now, those people aren't there. We have problems.

RONALD RIML's picture

"Or keep raising taxes?"

Since when have they been raising taxes, Gary???

Care to clarify that assertion. Federal tax rates have been in a downward spiral since Reagan.

PAUL MATTSON's picture


Dingy Harry is destroying this nation by not living up to his constitutional obligation to produce an annual budget for the past three years. And by the way, all five budgets introduced by President Obama were unanimously rejected in a bi-partisan manner in both the U.S. House and Senate.


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