WASHINGTON — In a preview of campaign themes for fall's congressional elections, Vice President Joe Biden and House of Representatives Republican leader John Boehner dueled Tuesday over how to fix the ailing economy, with Biden saying that progress has been steady even if slow, and Boehner sharply disagreeing.
"We've tried 19 months of government as community organizer. It hasn't worked," Boehner of Ohio told the City Club of Cleveland. He proposed extending all the expiring Bush-era tax cuts and urged the president to fire his top economic advisers.
Biden struck back hours later.
"Mr. Boehner is nostalgic for those good old days, but the American people are not," he said in a White House speech, charging that under President George W. Bush, "Mr. Boehner’s party ran the economy literally into the ground."
Statistics show that the economy is improving, but not robustly.
It’s been growing for four quarters after a deep downturn that began in December 2007, though the pace of growth slowed this spring. The gross domestic product, the value of all the nation's goods and services produced in a year, rose 2.4 percent from April through June, after 3.7 percent growth in the first quarter.
Unemployment, which peaked at 10.1 percent last October, dropped to 9.5 percent in June and July. The economy, which was shedding jobs by the hundreds of thousands per month when President Barack Obama took office in January 2009, has been adding them for months, though not vigorously.
Robert Bixby, the executive director of the nonpartisan Concord Coalition, a budget research group, said he "would not reach the conclusion" that Boehner did. "The economy is growing," Bixby said, "though it’s still in a precarious position."
The centerpiece of Obama's recovery plan was last year's economic stimulus legislation, which the nonpartisan Congressional Budget Office now estimates cost $814 billion.
"The stimulus could have been targeted better, but it probably prevented things from getting worse," said Michael Walden, a professor of economics at North Carolina State University. "The economy is better today, but the pace of growth is extremely slow."
Biden pointed Tuesday to a new report from the CBO on the stimulus's economic impact. It found that from April through June, the program lowered the unemployment rate by 0.7 to 1.8 percentage points, increased the number of employed people by 1.4 million to 3.3 million and increased the GDP by 1.7 to 4.5 percent from what they would have been without the stimulus — apparently enough to stave off another recession.
Households piled up debt in recent years, then saw the values of their homes and investments plunge. They're now trying to pay down their debt, Walden said, which depresses spending, which usually fuels economic growth.
No government policy is likely to ignite the economy in these conditions, he said: "I don't see there's an easy button any politician can push."
Republicans need a net gain of 39 seats to win the House, a goal that many independent analysts think is within reach. If the GOP gains control, Boehner is in line to be the speaker of the House.
Boehner called on Obama to fire Treasury Secretary Timothy Geithner and Larry Summers, the head of the National Economic Council. Biden brushed aside the suggestion.
Even such firings wouldn’t be enough, though, Boehner said.
"This is no substitute for a referendum on the president's job-killing agenda," he argued. "That question will be put before the American people in due time. But we do not have the luxury of waiting months for the president to pick scapegoats for his failing 'stimulus' policies."
Boehner offered little that was new; he proposed extending all key Bush administration tax cuts that are scheduled to expire at year's end, changing the health care overhaul law enacted earlier this year, listening more to the concerns of small business and making major reductions in spending. He didn't specify what he'd cut.
The CBO estimated last week that this year's federal budget deficit will top $1.3 trillion, the second biggest deficit in the last 65 years, only $71 billion lower than last year's record.
Biden argued that Republicans want to return to the Bush years — a favored Democratic attack line for this fall — saying that Bush inherited a budget surplus and left amid record deficits and the worst financial crisis since the Great Depression.
"We’re turning this great ship of state around," Biden said. While progress isn't fast enough, he said, "there isn't any doubt it's moving in the right direction."
The top GOP economic-policy goal for now is to extend the Bush administration's tax reductions. Democratic leaders want to extend only cuts that affect individuals who earn less than $200,000 annually and joint filers who make less than $250,000, letting rates on the wealthy return to where they were in the Clinton years.
House Democratic leaders want a vote before the November elections. However, many moderate Democrats, feeling pressure from small businesses and concerned that the GOP will paint them as tax raisers during an economic downturn, are balking at increasing the rate for the wealthy.
Biden said the administration would fight to extend the middle-class reductions and repeal the rest. Full extension, he said, is "a Wall Street tax cut, not a Main Street tax cut."
Republicans, Boehner said, are ready for that fight.
"So let me be clear: Raising taxes on families and small businesses during a recession is a recipe for disaster, both for our economy and for the deficit," he said. "Period. End of story. That’s why President Obama should work with Republicans to stop all of these job-killing tax hikes."
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