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Obama's Economic Plan Is A Pitch to the Working Class

By Peter Slevin and Shailagh Murray
Washington Post Staff Writers
Thursday, February 14, 2008

JANESVILLE, Wis., Feb. 13 -- Sen. Barack Obama offered a detailed prescription for the ailing U.S. economy Wednesday, answering skeptics who contend he has not matched his inspirational talk with a mastery of policy and targeting voters in crucial primaries in Wisconsin, Ohio and Texas.

In the aftermath of his sweeping victories Tuesday in Virginia, Maryland and the District, Obama now has 1,275 delegates to 1,220 delegates for Sen. Hillary Rodham Clinton (D-N.Y.), according to an Associated Press survey. If only pledged delegates -- those won in primaries and caucuses -- are counted and superdelegates are excluded, he leads by 134 delegates. Obama's campaign manager, David Plouffe, said it would be "next to impossible" for Clinton to close the gap in pledged delegates.

Obama's advisers and many Democratic strategists believe he can continue to chip away at Clinton's success with working-class voters and women by a new focus on the economy as he faces off against Clinton in Ohio and Texas, which hold primaries March 4; Pennsylvania, which holds its primary April 22; and Wisconsin, which votes on Tuesday.

Recent polls show Obama, familiar to many in Wisconsin because of his popularity in neighboring Illinois, with a narrow lead over Clinton. He opened offices earlier, began television advertising sooner and visited the state twice last year.

Clinton signaled her intention to fight Obama for the state with a new ad criticizing him for refusing to debate here before next Tuesday's primary. Clinton now plans to campaign in Wisconsin after stops Wednesday and Thursday in Texas and Ohio. Her husband, former president Bill Clinton, and daughter, Chelsea, also are spending considerable time in the state.

Rep. David R. Obey (D-Wis.), one of Obama's most senior backers in Congress, said Obama has to build on his likely strength in urban Milwaukee and the university town of Madison, and bolster his soaring talk of national unity with attention to bread-and-butter issues.

"In addition to his vision for the country, they want to know what he sees as the roadmap for helping working families," Obey said. "The national welfare, that's Jack Kennedy stuff. The family stuff, that's Bobby Kennedy stuff. People want to see both."

Sen. John McCain (Ariz.), the probable Republican nominee, had voiced a far more negative view of Obama's rhetoric in his own victory speech after Tuesday's primaries, suggesting a line of attack if the two senators meet in the general election. McCain said that stirring the country "with only rhetoric, rather than sound and proven ideas . . . is not a promise of hope. It's a platitude."

Campaigning in Waukesha, Obama struck back at McCain, recalling his admission that economics is not his strong suit. "After what he's said, it shows," Obama said. He added that McCain first declared that President Bush's tax cuts were unwise but now favors making them permanent.

"Somewhere along the line," Obama said, "he traded those principles for the nomination."

Clinton, speaking at a rally in McAllen, Tex., sought to make a similar point to McCain's. "I am in the solutions business. My opponent is in the promises business."

Obama laid out in one 38-minute speech several strands of a policy -- much of it more detailed versions of familiar themes -- that emphasizes the protection and promotion of working-class Americans. He chose for the site of the speech an SUV factory operated by General Motors, which on Tuesday announced record losses.

The series of proposals were on issues from tax reform and private savings to bankruptcy, trade and investment in the nation's infrastructure. He said he could pay for "every single element of this economic agenda" -- primarily by ending the Iraq war and by increasing taxes on corporations and the wealthiest Americans.

Clinton's campaign quoted a McCain economic adviser as dismissing Obama's proposals as "the most shameless piece of potential plagiarism" that he had seen because of its similarity to Clinton's own plan.

The newest element of his proposal was the establishment of a National Infrastructure Reinvestment Bank, which would spend $60 billion over a decade to rebuild deteriorating roads, bridges and waterways. Obama said the spending would generate 2 million new jobs, many of them in a construction industry that has been hard hit by the housing market downturn.

Some state and local governments have established separate infrastructure accounts that are not subject to balanced-budget rules as a way to finance long-range building projects. Lawmakers in Congress from both parties have flirted with the idea of a federal infrastructure account, but have backed off for fear of being accused of budgetary gimmickry designed to mask an expansion of government -- and of the federal budget deficit.

Obama took a page from the 2004 presidential campaign of Sen. John F. Kerry (D-Mass.), promising to fund his spending by ending tax breaks that he says encourage companies to invest overseas.

Many economists and some business officials agree that companies are reaping tax benefits from overseas expansion. Before Kerry offered his proposal in 2004, Citigroup executives told industry analysts the banking firm had lowered its effective tax rate from 31.3 percent to 30.6 percent, boosting quarterly income by $52 million, by putting more money into overseas operations.

The shift could provide more money for job creation at home, as Obama suggests, but few would say that taxes are a primary -- or even a significant -- factor in the movement of certain kinds of outsourcing. For instance, even sweet tax incentives cannot stop some companies from seeking vast savings abroad.

Obama's suggestion that he would finance long-term federal spending programs by ending the war in Iraq pushed the war debate into the realm of fiscal policy, a popular notion on the campaign trail but debatable from a budgeting point of view, since war funding is relatively temporary.

It also opened up Obama to traditional criticism from Republicans who called him a "Big Government" Democrat. The Republican National Committee unveiled a "Barack Obama spend-o-meter" on its Web site yesterday, tallying his total proposals at $850.35 billion.

Murray reported from Washington. Staff writer Jonathan Weisman and staff researcher Madonna Lebling contributed to this report.

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