News Puts Economy Atop Political Agenda
Saturday, June 7, 2008
A historic leap in oil prices, tumbling stocks and the biggest jump in unemployment in over two decades pushed economic issues back to the forefront of the political debate yesterday. The cascade of grim economic news brought prompt responses from the presumptive presidential nominees, Sens. Barack Obama and John McCain, and swiftly changed the White House campaign focus. McCain and his Republican allies had been able to push the debate back to Iraq and national security, terrain they see as far more comfortable than economic turmoil.
"This is a reminder that working families continue to bear the brunt of the failed Bush economic policies that John McCain wants to continue for another four years," Obama (D-Ill.) said in a statement.
McCain fired back: "The wrong change for our country would be an economic agenda based upon the policies of the past that advocate higher taxes, bigger government, government-run health care and greater isolationism. To help families at this critical time, we cannot afford to go backward as Senator Obama advocates."
For McCain (Ariz.), who is trying to inherit the White House from a Republican president presiding over the turmoil, the economic news was particularly unwelcome.
"These number are very disturbing," he told reporters in Florida. "They're the worst in 22 years, I'm told. Americans are hurting, American families are hurting, American homeowners are hurting. This is a very, very serious situation.''
In an interview with Bloomberg Television, Douglas Holtz-Eakin, his top domestic policy adviser, suggested that President Bush knows little about the economy beyond holding down tax rates -- perhaps the sharpest rhetorical break yet with the Bush administration. Bush and McCain share the same aims for the tax code, said Holtz-Eakin, a former Bush White House economist, adding, "Sadly, it seems that is all President Bush understood in the economy."
White House spokeswoman Dana Perino replied, "Mr. Holtz-Eakin is entitled to his opinion."
Because the Democrats control Congress, they plan to confront McCain with a series of tough economic votes in the coming weeks.
"Senator McCain is going to be faced with some difficult votes," said Senate Majority Whip Richard Durbin (D-Ill.), a key Obama ally. "He has supported the Bush economic policies, and that will put him on the wrong side of some important economic issues in the coming weeks."
As soon as next week, the House and Senate will vote on a 13-week extension of unemployment benefits, either as part of a war funding bill or as stand-alone legislation. White House spokesman Tony Fratto said yesterday that "the federal government has never in history extended unemployment benefits with the unemployment rate this low."
The Senate next week will take up a package of measures to address soaring gasoline prices. Before the Fourth of July recess, Democratic leaders hope to pass a House-Senate compromise expanding federal assistance to homeowners facing foreclosure. And a second economic stimulus package is expected to be ready in July.
"It's going to be 'the economy, stupid' all over again," said Sen. Charles E. Schumer (N.Y.), a member of the Democratic leadership. But it was unclear whether McCain would stand with GOP leaders and Bush. Asked about specifics such as expanding unemployment benefits or aiding low-income families, McCain said, "I think we have to do all of those things. I think we have to search for ways to give short-term relief. . . . I think we need to examine every option to try to help the American economy at this time, both short-term and long term."
Democrats said yesterday that their much more aggressive approaches are likely to prevail now, since other Republicans will side with them, with or without McCain.
"I can't believe these numbers don't make a change," said House Financial Services Committee Chairman Barney Frank (D-Mass.), referring to the day's economic news. "These numbers change everything."