Interviewing Chicago Mayor and former Obama chief of staff Rahm Emanuel on Sunday's Meet the Press, host David Gregory fretted over the 2009 stimulus not being big enough: "Do you think this president wasted it – the crisis you talked about – to do the big things at that moment, to really be a jobs president to create the demand in the economy that you're talking about through more government spending?" [Audio available here [1]]
While Emanuel defended the stimulus package, Gregory continued to hit from the left: "What were the opportunity costs of not a big enough stimulus, of healthcare reform that hurt him [Obama] politically at a time when he now needs, as you say, more government spending, but he doesn't have the political capital to get it done, does he, Mayor?"
Later in the broadcast, Gregory talked to Republican Congressman and Budget Committee Chairman Paul Ryan and kept pushing for more government spending: "What do you do in an economy where there is no demand? When the only ideas are tax cuts and spending cuts....Austerity alone, when there is not demand in the economy, does not appear to be the answer. You know that tax hikes and tax cuts have a neutral effect on economic growth, if you look at the Clinton and the Bush years. Demand's got to come from somewhere."
In reality, the 2003 Bush tax cuts bolstered economic growth [2], resulting in the creation of 8.1 million jobs in the years that followed.
Gregory also accused Ryan and the GOP of just being obstructionist, blocking Obama administration efforts to fix the economy: "The Vice President saying there are limits on what any party can do when you have the other party willing to do nothing, absolutely nothing. That's the Vice President talking. Are you offering anything different other than complete opposition to what the President wants to do?"
In part of his response to Gregory, Ryan explained: "Temporary stimulus, sort of sugar-high economics, are not what businesses are telling us they need to create jobs." Gregory then argued: "Aren't, aren't tax cuts, with no eye toward tax increases as part of spending cuts, isn't that sugar economics as well? Sugar-high economics? If you refuse to budge on the tax question?"
Here is a transcript of Gregory's October 9 exchanges with Emanuel and Ryan:
10:34AM ET
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DAVID GREGORY: Your unemployment rate in Chicago is higher than the national average.
RAHM EMANUEL: Right.
GREGORY: Let's look at the national average. New jobs numbers that came out this week...
EMANUEL: Yeah.
GREGORY: ...over the term of the Obama presidency and going back to February '09, and you can see on the screen the trajectory at 8.2 percent, the high point, of course, October of 2009, up over 10 percent. And now it's been distressingly steady here at 9.0 or 9.1 percent.
EMANUEL: Yeah.
GREGORY: Are there government remedies that are left to really solve this?
EMANUEL: Sure. Let me take one step back and take a look, a wide lens view and then come right down. Basically, about every six or seven years the American economy reinvents itself with a single engine. That was what NASA was for invention. There was a military build-up in the '80s, the Internet and the new economy in the '90s, housing in 2000. I believe, if you take a look at the data, rebuilding our infrastructure, our roads, our bridges, our broadband for the new economy, is essential as that single engine.
While you have a high unemployment, the 9 percent you noted, among building trades, the carpenters, iron workers, the building trades that used to be in the housing industry and the office building construction, it's double that. Have them rebuild our schools. Have them rebuild our roads because we have a 21st century economy sitting on a 20th century infrastructure. And that should be the reinvention engine, like NASA was, like the Internet was at different moments in time, and we will be a stronger, more productive economy for that rebuilding of America.
GREGORY: You, you had that opportunity for stimulus...
EMANUEL: Mm-hmm.
GREGORY: ...in the middle of the financial crisis when you were in Washington as chief of staff. There were political concerns about how big of a stimulus package you could get through. What you're talking...
EMANUEL: You noticed that, huh?
GREGORY: Yeah. But what you're talking about now no longer enjoys political consensus.
EMANUEL: Oh, I don't...
GREGORY: Do you think this president wasted it – the crisis you talked about – to do the big things at that moment, to really be a jobs president to create the demand in the economy that you're talking about through more government spending?
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GREGORY: But if you look at the President's approval rating, I'm going to put it up on the screen, 41 percent approval. His disapproval on handling the economy...
EMANUEL: Sure.
GREGORY: ...is up in the 60s. I asked you about his opportunity to really become a jobs president. You have talked about the fact that you advised him at times to take a more practical approach, not to double down in the ways that you say he ultimately did. What were the opportunity costs of not a big enough stimulus...
EMANUEL: Sure.
GREGORY: ...of healthcare reform that hurt him politically...
EMANUEL: Yeah.
GREGORY: ...at a time when he now needs, as you say, more government spending, but he doesn't have the political capital to get it done, does he, Mayor?
MAYOR EMANUEL: But – first of all – but David, no. He – let me say this. As you aptly pointed and that is correct, I often advised the President about doing the quick political thing, and he looked at the long-term. And he rejected the quick and political because it was in America's interest. That's both true about financial reform, health care, the big decisions. And he's never lost his fight for America. And he did make decisions that were in the long-term interest.
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10:55AM ET
GREGORY: Let's talk about the campaigning that's going on. I did speak to Vice President Biden earlier this week in Washington at the Atlantic Ideas Festival, and he made it very clear what he thinks about Republicans and their view of trying to help the economy, or work with this president. And this is what he said.
JOE BIDEN: There are also limits on what government can do when one party decides, "We're going to do nothing. We're going to do nothing." Nothing. Let me say it again, "We're going to do nothing."
GREGORY: You couldn't hear what the audience was, was hearing.
PAUL RYAN: Yeah, I'm sorry, I didn't catch that.
GREGORY: The Vice President saying there are limits on what any party can do when you have the other party willing to do nothing, absolutely nothing. That's the Vice President talking. Are you offering anything different other than complete opposition to what the President wants to do?
RYAN: Well, look, I suppose that's good politics, but it's not factually accurate. We've passed over a dozen pieces of legislation, jobs legislation, that are all sitting over in the Senate. We passed a budget to pay off the debt to get the economy growing. We passed energy reform. We passed regulatory reforms, small business tax relief. We have passed so many different jobs bills throughout this year that are sitting over in the Senate.
Here's the deal: we have a difference of opinion with the White House on how best to create jobs. We don't think doubling down on failed stimulus policies, which have already proven to fail, is the right way to go, so we want to work with ideas that have proven to work. That means helping small businesses grow. That means getting certainty in our policy, regulations, taxes, debt, so the small businesses can grow. Temporary stimulus, sort of sugar-high economics, are not what businesses are telling us they need to create jobs.
GREGORY: Aren't, aren't tax cuts, with no eye toward tax increases as part of spending cuts, isn't that sugar economics as well? Sugar-high economics?
RYAN: So-
GREGORY: If you refuse to budge on the tax question?
RYAN: So what we're getting from the White House are temporary tax policies, stimulus, which didn't work when President Bush tried it, and spending increases with permanent tax increases. Let's look at the permanent tax increases they're not talking about. In 15 months' time the top tax rate on small businesses goes to 44.8 percent. Now they're going to throw another tax increase on it. We're going to be taxing small businesses at about 50 percent.
According to the Treasury Department, 80 percent of small businesses, 80 percent of businesses file as individuals. Sixty percent of the businesses in this country file their tax rates as individuals and will get hit by this new tax that goes to 50 percent in 15 months. Why would we do that? In Canada – overseas in Wisconsin, we usually refer to Lake Superior. Canada, they're lowering their tax rate to 15 percent. Ireland's at 12.5 percent, China, 25 percent. And we're going to be taxing our successful small businesses, where more than half our jobs come from, at 50 percent? Why would we want to pass that?
GREGORY: What do you do in an economy where there is no demand? When the only ideas are tax cuts and spending cuts, when we have seen – you've seen it in Great Britain. The debate is roiling Europe now. Austerity alone, when there is not demand in the economy, does not appear to be the answer. You know that tax hikes and tax cuts have a neutral effect on economic growth, if you look at the Clinton and the Bush years. Demand's got to come from somewhere.
RYAN: So, so the idea that we can borrow and spend more in Washington, create more demand in economic growth, has already proven to fail. We just – we've done trillions of dollars of stimulus spending already from both administrations. It hasn't worked. And so what businesses are telling us they need is more certainty. They have no idea how much higher their taxes are going to go in 15 months. We have a slew of new regulations coming out of Washington that's making it really hard for them to create jobs. And so I would say policy certainty from Washington, which is the kind of leadership and the pro-growth agenda we've been trying to pass in the House, is really what is necessary to create jobs.
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- Kyle Drennen is a news analyst at the Media Research Center. Click here [3] to follow Kyle Drennen on Twitter.