The President on the Economy

The President spent his weekly talk on the economy, speaking about two things that have been discussed here in the last week. The first deals with the clean energy economy, and the jobs involved in a renewable energy sector. The second is the coming political battle over the extension of the Bush tax cuts, and the Democrats making the case that the Republicans want to take us back to the failed Bush economic policies.

An important political point to be considered here will be the tax situation for those who are not in the wealthiest tax brackets. An across the board tax increase for those folks, including stiff increases in inheritance taxes, will create a backlash against Democrats nationally. The terrain upon which the battle will be fought over the Bush tax cuts being extended will be the key to victory. If the Democrats can define the fight as the President does, they can survive. But if the Republicans can convert the political spin to a tax increase for all (as Rep. Pence does here) then it could spell more trouble for the Dems.

An overhaul of the tax system is needed to deal with this problem, but a deal does not appear likely before the mid-terms. Both sides are digging in and preparing for battle. Read the Washington Post story here.

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