Obama says Republicans holding recovery hostage

Published on Monney Control news center, Source: Reuters, Sep 11, 2010.

US President Barack Obama (see on in.com) accused Republicans on Friday of holding the middleclass hostage as he defended his efforts to stimulate the sluggish economy and try to reverse Democrats’ grim election prospects.

With opinion polls showing more Americans questioning his economic leadership, Obama used a rare news conference at the White House to hammer home a campaign-style message painting Republicans as obstructionist and the party for the rich … //


The president said Republican policies under his predecessor George W Bush had led to “a financial crisis and a terrible recession that we’re still digging out of today.”

The news conference capped a week in which Obama rolled out modest tax cuts and spending proposals aimed at jump-starting job growth.

But the steps, which the White House says will cost around USD 180 billion, were described by economists as too small to make much of a difference in the USD 13.2 trillion US economy.

On Friday, Obama zeroed in on the Republican call for a two-year extension of Bush-era tax cuts for all Americans.

The president called on Congress to extend tax relief for the middle class by this month but repeated his position that the country cannot afford to keep tax rates low for families earning more than USD 250,000 a year, which would cost an estimated USD 700 billion over 10 years.

He said Republicans were punishing the middle class and delaying the recovery to deliver tax breaks to millionaires and billionaires.

“We can have a further conversation about how they want to spend an additional USD 700 billion to give an average of USD 100,000 to millionaires. That I think is a bad idea,” Obama said.

“Why hold the middleclass hostage in order to do something that most economists don’t think make sense?”

His comments about a “further conversation” were seen by some as a hint that he may be willing to work with Republicans on the tax cut issue but others said his strong tone all but ruled out a compromise.

The Republican leader in the House, John Boehner, swiftly dismissed Obama’s criticism.

“Half-hearted proposals and full-throated political attacks won’t end the uncertainty that is keeping small businesses from creating jobs,” Boehner said in a statement as Obama spoke.

US financial markets showed little reaction to Obama’s remarks. The stock market’s mood has been improving, especially after jobs data on Thursday showed new claims for unemployment benefits fell to a two-month low in the latest week.

Obama formally announced long-time economic adviser Austan Goolsbee as the new head of the White House Council of Economic Advisers, a key source of policy advice for the president.

Already a familiar face on financial news television, Goolsbee is an effective communicator and will likely be a persuasive advocate for Obama’s approach to the economy.

During the wide-ranging news conference, Obama also said:

‘Enormous hurdles’ remained to achieving a Middle East peace deal … (full text).

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