Most Read: Opinions

direct signup
ThePlumLIneGS whorunsgov plumline
Posted at 08:59 AM ET, 02/14/2012

The Morning Plum: Romney’s convoluted claims about the auto bailout

Ever since the signs of an accelerating recovery started trickling in, Mitt Romney has struggled to craft a coherent response to the good economic news. He’s bounced back and forth between two claims: That Obama made the recession worse; and that yes, okay, the economy may be improving, but only in spite of the President’s policies.

With still more good news coming in about the auto industry’s rebound, and with the high-stakes Michigan primary looming, Romney has now published an Op ed in the Detroit News that will drive a lot of discussion today. In it, he makes a series of claims:

1) The auto companies’ turnaround is “indisputable good news.”

2) However, Obama’s auto rescue reveals “all the defects in President Obama’s management of the American economy,” and things “would be better” without his intervention.

3) In rescuing the auto industry, Obama followed Romney’s suggested approach (managed bankruptcy).

4) However, after following his lead, Obama then mucked things up with a government bailout, leaving taxpayers on the hook for billions to benefit “union bosses.”

5) Despite the industry’s rebound, we nonetheless would have been better off letting the “free market” do “what it does best.”

Putting aside the convoluted nature of this series of claims, Romney has left an inconvenient fact out of his account: He predicted that the auto bailout would lead to the failure of the entire industry. In that now-infamous Op ed entitled “Let Detroit Go Bankrupt,” Romney said that a bailout would be “suicidal,” and that if the companies got it, “you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.”

Obviously, that hasn’t happened yet. Which is why Romney is now fixating on taxpayer debt and “union bosses.” It’s the only way he can hail the good news about the industry’s rebound while simultaneously deriding the government action that helped bring it about as a failure.

Romney’s claim that his approach (managed bankruptcy alone) would have been better for the industry has been dismissed by most experts who say it would not have been viable, given the state of the economy at the time. No amount of bluster about “union bosses” can conceal the fact that on the core ideological question of whether goverment should have stepped in to bail out an entire industry — rather than letting the free market work its magic — Obama got it right, and Romney got it wrong.

More broadly, this highlights Romney’s larger dilemma: How do you acknowledge that the economy is improving while simultaneously persuading voters that things would be improving faster still if it weren’t for the guy running the place?

* Brinkmanship intensifies around payroll tax cut: With the GOP agreeing to extend the payroll tax cut without paying for it, Ezra Klein games out the Senate Dems’ plan to hitch unemployment benefits and the Medicare patch to the tax cut in order to box Republicans in further:

If push comes to shove, they’ll just amend the payroll tax cut with the unemployment benefits and the Medicare patch complete with pay-fors on those items that the two sides agree on. If Republicans want to block a tax cut for all Americans because they’re offended by the idea of helping the unemployed and keeping grandma’s doctor from taking a 30 percent pay cut and fleeing the Medicare program, let them.
Whether Republicans would find that as intimidating a prospect as Democrats hope is anyone’s guess.

The House GOP can pass their payroll tax cut extension and challenge Senate Dems to pass it as is — whereupon Dems would tack on UI and the Medicare fix and kick the ball back into the GOP’s court — which means a reprise of last year’s game of chicken with a tax cut for 160 million Americans.

* Will House Tea Partyers go for payroll tax reversal? Politico reports that conservative House GOPers are expressing

extreme discomfort with the reversal. One conservative Republican mused about a primary challenge for voting for something that adds $100 billion to the deficit. Another said the party, after harping all year about the troubled Social Security trust fund, is now proposing to “rob it blind.”

The simple fact is that many House conservatives don’t support this tax cut for 160 million working Americans. They can only bring themselves to do so in exchange for big concessions from Dems, such as a federal wage freeze — or more sacrifices from working people — and more spending cuts that could harm the recovery.

* Elizabeth Warren holds slight edge over Scott Brown: She leads the Massachusetts Senator 46-43 in a new WBUR poll, which is within the margin of error.

Bright spots for Brown: He holds a very slight edge on which candidate would do more for regular people — this race is all about the middle class — and has higher favorability ratings than Warren. However, there’s still a large bloc of Massachusetts voters with no clear opinion of her.

* Scott Brown veers hard right on contraception: Steve Benen, on the Senator’s rejection of Obama’s birth control accommodation:

Scott Brown apparently believes the way to win a close race in Massachusetts in the 21st century is to block access to contraception and other forms of preventive care — even when his more centrist GOP colleagues are siding with the Democratic president.

This could become a major issue in the race — more on this later.

* Do Romney’s advantages really make him inevitable? We keep hearing that Romney’s organization and money make him inevitable, but Aaron Blake offers an interesting reality check: Santorum has won more states than any other condender without much of either, because this campaign is all about media coverage and momentum.

Key takeaway: The campaign is now shifting into a more national phase, and the question of whether Santorum can ramp up will determine whether Romney can be stopped.

* Santorum-mentum!!! We now have a third national poll, this one from the New York Times and CBS, showing Santorum surging into a statistical tie with Romney, his rise fueled by conservatives, Tea Partyers, and evangelicals.

Yes, I know, national polls don’t matter. But these findings are relevant, in that they signal that these core GOP constituencies can’t bring themselves to come to terms with Romney as the nominee.

* They just don’t really like him that much: Nate Silver sums up Romney’s problem:

In states and counties that would appear to be strong for him, turnout is generally running below its 2008 pace. But in his weaker areas — say, most of the state of South Carolina — it has been steady or has improved some.

Silver also points out that voter commitment to Romney is weaker than to Santorum in Michigan, where Romney has deep and longtime ties.

* Senate Dems imperiling the recovery? The New York Times editorial board excoriates Senate Democrats for being politically unwilling to pass Obama’s budget. It argues that Obama’s budget is heavy on economic stimulus, and not passing it is tantamount to putting politics before the recovery — even if Dems are the ones to blame.

Meanwhile, the Post edit board, which is partly critical of the budget, flatly states that he was “right” to break his promise to cut the deficit in half, rather than put the recovery at risk.

* And the budget battle frames Campaign 2012: Jonathan Cohn gets to the heart of it:

Budgets aren’t just about deficits, after all. They’re also about priorities. Obama has signaled that he’s willing to reduce the deficit, but only in a way that preserves the core promises of existing programs. Republican leaders say they’re willing to end those promises. It’s a pretty stark choice — and one we’ll be debating for the next year.

What else?

By  |  08:59 AM ET, 02/14/2012

 
Read what others are saying
     

    © 2011 The Washington Post Company