Is GOP stalling on economy to hurt Obama?

House Speaker John Boehner of Ohio takes questions during his weekly news conference on Capitol Hill in Washington, Thursday, May 17, 2012. (AP Photo/J. Scott Applewhite)
House Speaker John Boehner of Ohio takes questions during his weekly news conference on Capitol Hill in Washington, Thursday, May 17, 2012. (AP Photo/J. Scott Applewhite) (J. Scott Applewhite)
Posted: May 23, 2012

WASHINGTON - Are Republican lawmakers deliberately stalling the economic recovery to hurt President Obama's reelection chances? Some top Democrats say yes, pointing to GOP stances on the debt limit and other issues, which they say are causing unnecessary economic anxiety and retarding growth.

The latest Democratic complaint came after House Speaker John A. Boehner said last week that when Congress raises the nation's borrowing cap in early 2013, he will again insist on big spending cuts to offset the increase. Boehner (R., Ohio) continues to reject higher tax rates, which Democrats demand be imposed on the wealthy.

That led Sen. Chuck Schumer (D., N.Y.) to say Boehner is virtually ensuring another debt-ceiling crisis as bad or worse than the one that shook financial markets nine months ago.

"The last thing the country needs is a rerun of last summer's debacle that nearly brought down our economy," Schumer said in a statement. In an interview, he added: "I hope that the speaker is not doing this because he doesn't want to see the economy improve, because what he said will certainly rattle the markets."

Boehner responded in a statement: "Republicans have passed nearly 30 bills that would help small businesses create jobs and we are waiting on Senate Democrats to vote on these commonsense measures. The failure to act on these jobs bills, as well as our crushing debt burden, is undermining economic growth and job creation."

Democrats say Republicans loaded their jobs bills with provisions certain to doom them in the Senate, such as restrictions on unions and on regulatory panels such as the Environmental Protection Agency.

Regardless of whether Schumer's suspicions are right, there is evidence that unceasing partisan gridlock and the prospect of big tax increases and spending cuts in January are causing some companies to postpone expansions. Even small economic slowdowns are bad news for Obama, who is seeking reelection amid high unemployment.

The most obvious showdown will happen soon after the Nov. 6 election. Unless a lame-duck Congress can make deals, the economy will suffer a double whammy of large tax increases and spending cuts, starting Jan. 1. The tax increases would hit virtually every working American and the spending cuts would affect military and domestic programs.

Economists say that what Federal Reserve Chairman Ben S. Bernanke calls a "fiscal cliff" could possibly lead to another severe recession.

On top of that, perhaps by late January or so, Congress and the president - be it Obama or Republican Mitt Romney - will again confront the need to raise the country's borrowing limit or else trigger the first-ever failure by the U.S. government to pay its debts. A partisan showdown over this issue last summer led to a downgrade in the nation's creditworthiness and a sharp stock-market drop.

These crucial decisions will occur after the presidential election. But investors, planners, and business owners make decisions about hiring, expansion and investments months in advance. The more they worry about a serious economic downturn in nine months or so, the more reluctant they are to expand operations and hire workers now.

"All that uncertainty has us cautious, and we're scaling back our hiring expectations," said Eric Remington, vice president of Kaman Corp., which recently canceled plans to hire 200 new workers at a defense aerospace plant in Jacksonville, Fla.

Schumer and other top Democrats have said for months that GOP lawmakers may be trying to strangle the economic recovery for political reasons.

"Their strategy is to suffocate the economy for the sake of what they think will be a political victory," Obama's campaign manager, Jim Messina, wrote in an e-mail to supporters last October, when Congress was debating a jobs bill.

House Minority Leader Nancy Pelosi (D., Calif.) did not ascribe partisan motives to Boehner's latest warnings about the next debt-ceiling showdown. But she said he may be unnecessarily hurting the economy. "It already can be damaging, just the fact that it's brought up," Pelosi told reporters Thursday.

Republicans say it's absurd to make such an accusation. They point to bipartisan efforts to pass jobs-creation bills, trade pacts, and, after some arguments, an extension of the payroll-tax cut that Obama originally had proposed for only one year.

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