Any Republican refusal to accept President Barack Obama’s fiscal plan may ruin Christmas for the nation’s retailers, the White House claimed in a report released Monday morning.
“The National Retail Federation is forecasting that holiday sales will grow 4.1 percent this year … [but] if Congress does not act on the President’s plan to extend tax cuts for the middle-class, it will be risking one of the key contributors to growth and jobs in our economy at the most important time of the year for retail stores,” says the report, which was prepared by the Obama White House’s National Economic Council and the president’s Council of Economic Advisers.
“The holiday season is no time to threaten middle-class pocketbooks,” urges the report, titled “The Middle-Class Tax Cuts’ Impact On Consumer Spending & Retailers.”
Democrats made the same claim June 28, 2011, during talks about increasing the federal government’s ability to borrow more funds.
“Happy Holidays America: [Rep. John] Boehner plan would have the debt ceiling all over again during the holiday season, which is critical for the economy,” White House communications director Dan Pfeiffer declared. (RELATED: GOP aims to gut Christmas, White House alleges)
Obama spokesman Jay Carney and top political aide David Plouffe also made the same claim that day.
The new report is part of Obama’s media campaign to blame Republicans for scheduled tax increases, spending cuts and the stalled economy during Obama’s tenure.
The apparent disagreement over middle-class tax cuts — many of which were pushed by George W. Bush in 2001 amid opposition from Democrats — is also part of an ideological fight over the size and ambition of government.
Obama and his progressive allies want to boost government’s spending and clout with extra taxes, primarily from wealthier Americans.
Republicans want to curb governments’ reach, in part by keeping taxes low for all Americans, including the economy-boosting wealthy investors.
That ideological fight is being waged during talks over the so-called “fiscal cliff,” the long-scheduled January arrival of tax increases and spending cuts that could extract $500 billion in annual spending from the economy.
Obama says he wants the GOP to stop the scheduled tax increases for 98 percent of the public, and has promised to oppose any effort to stop planned tax increases for the wealthiest 2 percent.
That position makes it difficult for the GOP to pass a temporary extension of current tax rates, prior to a bipartisan comprehensive tax-reform package planned for late 2013.
Obama’s PR positioning frames the GOP as the instigator of the planned tax increases, which many Democrats have sought for years.
The president’s messaging also seems poised to set up Republicans as scapegoats for the economy’s very slow growth during Obama’s first term in office.
A failure to extend the expiring middle-class tax cuts would cost middle-class families roughly $2,200 per year and hurt the consumer-driven slice of the nation’s economy during the “holiday season” — the White House’s secular version of “Christmas” — says the report.
“When American families spend more on things like clothes, cars, furniture, and food, for example, this spending generates greater profit for businesses and increased demand that causes businesses to invest and hire more workers.”
If Washington fails to agree on the president’s proposals, the resulting tax increases “could cut the growth of real consumer spending by 1.7 percentage points in 2013 … [and] slow the growth of real GDP by 1.4 percentage points,” the report added.
That reduction from the nation’s growth rates would return U.S. economic growth to only 0.6 percent, given the economy’s recent 2 percent growth rate.
GDP growth has averaged 3.25 percent since 1947.
Republicans say the current slow growth is caused by Obama’s profligate spending and enthusiastic regulation of critical economic sectors, including health, banking, education, energy and housing.
Also, the formal unemployment rate has remained high; it was 7.9 percent in October. More realistically, roughly 23 million Americans are unemployed or underemployed, and many more are worried about their finances, their careers and their relatives’ job-prospects.
The national debt has grown to $16.3 trillion because the government has tried to jump-start the economy with almost $5 trillion in borrowed funds.
