Obama takes aim at GOP over fixing economy

CLEVELAND — President Obama laid out a fiery argument for retaining Democrats and punishing Republicans in the midterm elections, calling on voters Wednesday to reject GOP economic ideas that he said favor millionaires at the expense of struggling families.

Obama took the unusual step of describing the financial and medical struggles he, first lady Michelle Obama and their families have faced, personalizing a political debate as he sought to position himself on the side of middle-class families.

He made the argument about more than economic policies, saying core American values — such as hard work and individual responsibility — are at stake in the midterms.

"I had a single mom who ... would wake before dawn to make sure I got a decent education. Michelle can still remember her father heading out to his job as a city worker long after multiple sclerosis had made it impossible for him to walk without crutches," he told the crowd of about 800.

"Yes, our families believed in the American values of self-reliance and individual responsibility ... . But they also believed in a country that rewards responsibility. A country that rewards hard work. A country built upon the promise of opportunity and upward mobility," he added. He proposed $180 billion in new construction and tax credits meant to spur investment and research.

But the address, at a suburban community college, also represented an intensifying campaign by Obama to discredit Republicans and craft a road map for Democrats confronting a potentially disastrous election cycle.

He singled out House Minority Leader John Boehner of Ohio, an architect of a Republican strategy that Obama said aims to obstruct his agenda and to restore Bush-era policies, including tax breaks for the wealthiest Americans.

The president accused Republicans of distorting recent history with their claim that Democrats are responsible for faltering employment and the ballooning deficit.

Obama hung today's economic troubles on "the flawed policies and economic weaknesses of the previous decade." He said he had hoped the resulting crisis would lead Republicans to work with Democrats on solutions, but "some Republican leaders figured it was smart politics to sit on the sidelines and let Democrats solve the mess ... ."

Cleveland was chosen for Obama's trip as a direct rebuttal to Boehner, who in the same city two weeks earlier called on Obama to fire his economic team. Obama declined.

The president seemed to revel in ridiculing Boehner's speech. "There were no new policies from Mr. Boehner. There were no new ideas," Obama said. "There was just the same philosophy we already tried during the decade that they were in power — the same philosophy that led to this mess in the first place: Cut more taxes for millionaires, and cut more rules for corporations."

Boehner, meanwhile, sought to take advantage of Obama's visit for his own purposes, unveiling what the Republican called a new "two-point plan" to freeze spending and continue the Bush tax cuts.

His ideas resembled those he had proposed previously, and Democrats criticized them as insufficient to reduce the deficit.

Obama's visit to Cleveland — a city that has seen private employment shrink and the housing market grind to a halt — came amid a renewed White House effort to focus on the economy. It brought him to usually friendly Democratic territory — Cuyahoga County — with a slew of state Democratic officials on the guest list, including Gov. Ted Strickland, Sen. Sherrod Brown and Reps. John Boccieri, Marcia Fudge and Dennis Kucinich.

On the Bush-era tax cuts, enacted in 2001 and 2003 and scheduled to expire in January, Obama staked out the position his administration has sought for months to defend: Tax cuts for the middle class should be extended, but taxes should be permitted to rise on families with incomes that exceed $250,000 a year.

The changes would affect dividend and capital-gains rates and various other tax benefits, as well as income from wages and salaries.

The strategy — pushing for legislation to save some tax cuts but not all — carries risks. Since all tax breaks would expire automatically at the end of the year if Congress fails to act, sweeping increases for taxpayers at every income level could result, a major blow to recovery hopes and a colossal dose of blame for voters to parcel out to lawmakers.

Some influential Democrats, and Obama's former budget director, Peter Orszag, have suggested a compromise might be necessary — one to extend all the tax cuts temporarily, perhaps for a year or two — given the current election-year animosity between the two parties.

But Obama strongly signaled Wednesday that he wasn't about to sign off on any such deal.

"Let me be clear to Mr. Boehner and everyone else. We should not hold middle-class tax cuts hostage any longer," the president said.

He argued strenuously that the nation cannot afford the $700 billion price tag of extending cuts for the wealthiest Americans, who he said are more likely to save the additional money than spend it. He also declined to redefine the middle class by increasing the $250,000 limit, a rebuff to some Democrats who had discussed maintaining tax cuts for families with income as high as $1 million a year.

White House officials said the speech was intended to draw a distinction between Obama's position and that of congressional Republicans who want to extend the tax cuts for everyone.

Obama also discussed his proposal for new business-tax breaks and infrastructure spending to help right the nation's economy. Rather than selling that plan to voters, however, Obama again used it to draw a contrast with Republicans.

For example, he said he wants to make permanent an existing tax credit for research and development, a provision that helps keep jobs in the country.

He also wants to permit corporations to write off 100 percent of their investments in 2011, to "encourage large corporations to get off the sidelines and start putting their profits to work in places like Cleveland and Toledo and Dayton."

To cover the cost — about $130 billion over the next decade — Obama said he would close "billions of dollars in tax breaks that encourage companies to create jobs and profits in other countries."

"If we're going to give tax breaks to companies," he said, "they should go to companies that create jobs in America, not those that create jobs overseas. That's one difference between the Republican vision and the Democratic vision. And that's what this election is all about."

Compiled from The Washington Post, The Associated Press, the Tribune Washington bureau and McClatchy Newspapers