Clash over economy sets tone for 2012 election

[October 12, 2011]  WASHINGTON (AP) -- For a voter looking to preview next year's presidential election, nothing placed the competing arguments in sharper focus than a single day framed by President Barack Obama at a Pittsburgh union training center, a GOP presidential debate at a New England Ivy League college and a Senate vote that effectively killed the president's package of economic measures.

Tuesday unfolded in nearly split-screen fashion, with Obama making his economic case in Pennsylvania, Republicans offering a rebuttal at Dartmouth College in New Hampshire and Senate Democrats failing to overcome a Republican filibuster of Obama's $447 billion jobs bill.

"What's happened in this country, under the Obama administration, is that you have a president who I think is well-meaning but just over his head when it comes to the economy," former Massachusetts Gov. Mitt Romney said, summing up the Republican view during the Washington Post-Bloomberg debate at Dartmouth.

Indeed, Republicans have built a thick brief against Obama that casts him as an ineffective naif, too willing to prime the economy with temporary measures, too eager to raise taxes and too willing to give government stifling regulatory powers.

Obama, in turn, is defining his economic stewardship by giving credit to his stimulative policies, attributing the anemic recovery and persistent unemployment to factors beyond his control -- a tsunami in Japan, unrest in the Arab world and a potentially devastating European debt crisis -- and blaming congressional Republicans for blocking his latest and highly promoted jobs initiative.

"A lot of folks are living week-to-week, paycheck-to-paycheck, even day to day," Obama said in Pittsburgh. "They need action, and they need action now.... In other words, they want Congress to do your job."

That the GOP presidential debate, exclusively devoted to the economy, occurred on the same evening that the Senate cast its vote on Obama's jobs bill was coincidence. But both served to define Obama's Republican opposition and set the tone for the developing presidential contest.

Obama had been campaigning for the bill across the country, making strategic stops in key presidential battleground states and in the backyards of congressional Republican leaders in a strategy designed to build public support for the bill, but also to serve Obama's long-term political goals.

No matter who emerges from the Republican field, members of Obama's camp are already signaling that they will tie the GOP contender to Republicans in Congress. Their goal is to weigh down the Republican nominee with the burden of an institution held in little esteem, and to convince the country that Obama's opponent is simply a continuance of outside-the-mainstream GOP leadership.

"The Republican presidential candidates have now had many opportunities to articulate a plan for economic recovery," Rep. Debbie Wasserman Schultz, the chairman of the Democratic National Committee, said in a statement Tuesday. "Instead, they have simply continued their courtship of the tea party and its ideology, marching in lockstep with the Republicans in Congress."

At the same time, Obama has been building a defense against the expected Republican attacks. The year began with an expectation in the White House, matched by many economists, that the recovery would take hold. But over ten months, the country took hits from a disaster in Japan, Arab turmoil that contributed to high gasoline prices, and the threat of a Greek financial default with global repercussions.

"And then unfortunately, Washington got involved in a self-inflicted wound with the debt ceiling fiasco," Obama said during a meeting with his jobs council in Pittsburgh. "And all those things, I think, led to both consumers and businesses taking a big step backwards and saying, we are just not sure where this thing is going."

But Obama has hitched his political fate and the economy's on his jobs plan. It would have extended and expanded payroll tax cuts, provided continued jobless benefits to the long-term unemployed, helped keep teachers and police officers on the job and paid for tens of billions of dollars in public works projects. The legislation would have paid for it all with a surtax on millionaires. Obama has said he will now seek to divvy up the bill and seek passage of its component parts.

The competing, partisan views of such an economic stimulus go to the heart of presidential politics.

Obama and his team say the initial $825 billion stimulus that Obama succeeded in passing through Congress in 2009 halted the recession and put the economy on the path to recovery. He credits the government's intervention in the auto industry for saving General Motors and Chrysler. The president has said his new plan would create as many as 1.9 million jobs and help boost economic growth by as much as 2 percent.

Republicans counter that the 2009 stimulus failed and left the country in its current straits, with snail paced growth and unemployment stuck at 9.1 percent.

The Republican presidential field is offering a list of counterproposals. Texas Gov. Rick Perry is calling for greater domestic oil and gas exploration. Herman Cain wants a massive overhaul of the tax system, with a 9 percent corporate tax rate, a 9 percent individual tax rate and a 9 percent sales tax. Former Sen. Rick Santorum of Pennsylvania is proposing a repeal of every regulation put in place during Obama's presidency that would cost the economy more than $100 million a year. "Repeal them all," he said.

Obama is already steeling himself.

Members of Obama's own jobs council pressed him on Tuesday to consider the impact of health, environmental and financial rules on jobs. Obama said he was sympathetic to their plea and that his administration is undertaking a review of federal regulations.

But in an argument he will likely make on the campaign trail, he said:

"Once we make all the regulations smarter, eliminate the dumb ones and so forth, there's still going to be some tensions that exist around, you know, how much do we value this extra 10,000 jobs versus these extra hundred thousand asthma cases."

[Associated Press; By JIM KUHNHENN]

AP White House Correspondent Ben Feller contributed to this report.

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