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Robert Kuttner

Robert Kuttner

Posted: September 12, 2010 08:33 PM

Maybe Not Such a Mid-Term Blowout

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Winston Churchill once said that you can always count on Americans to do the right thing--after they've tried everything else.

The Obama administration has kept progressive economic policies to be used as a last resort -- In Case of Emergency Break Glass.

Well, the emergency is here in the form of a protracted recession and a threatened mid-term election blowout. And sure enough, President Obama is discovering his inner populist.

Rejecting the advice of his departing budget director, Peter Orszag, Obama has insisted that the Bush era tax cuts, which expire this year, be extended for "only" about 98 percent of Americans, but not for households making over $250,000 a year. Hard to argue with that, but watch the GOP try. The more the Republicans hold hostage this plan for tax relief for millionaires, the more voters appreciate whose side they are really on.

Obama has belatedly proposed a $50 billion infrastructure program, to put Americans back to work. He should have proposed four times as much, and long ago, but it's a start.

He has begun smoking out Republican inconsistency and hypocrisy on issues like regulation of banks, where the GOP tries to be anti-Wall Street but also anti-regulation. And how can the right be in favor of both fiscal discipline and tax cuts for the rich?

The right may have peaked a little too soon. The Gallup Poll for the last week in August showed a ten point swing back to the Democrats in congressional match-up races.

How did this come about?

In general, voters unhappy with the recession are inclined to vote against the incumbent candidate, but so many of the Republicans are so crazy that voters may think twice about voting for them. The Tea Party is no longer that different from the mainstream Republican Party, and it doesn't speak for most Americans.

Obama has been uncomfortable in the role of partisan, but he has gotten off some good speeches since Labor Day--and not a moment too soon.

The Republicans have already effectively nationalized the 2010 mid-term election, portraying it as a referendum on Obama. But the president, even with popularity ratings of around 45 percent, is more popular than most politicians. And if he can smoke out Republican ideas, most voters will notice that they agree with Obama more than they agree with John Boehner and the GOP. .

Here are nine ideas for Obama to hold down Democratic losses in the mid-term.

One. End the strip-tease and nominate Elizabeth Warren to head the new Consumer Financial Protection Bureau. Nothing would better identify the Republicans with Wall Street and nothing else would so energize a dispirited Democratic base. The nastier the confirmation fight, the better. Or do a recess appointment and let the right complain about Warren's concern for consumers rather than bankers.

Two. Make it clear that your administration will not support cuts in Social Security. Declare that if the fiscal commission comes up with a formula that reduces benefits for seniors, its recommendations will be a dead letter. Dare the Republicans to follow suit.

Three. Sign an executive order requiring that companies that bid on government contracts have good wages and working conditions, and follow labor laws. The labor movement is fed up with being the caboose on your train. Nothing would energize trade unionists as much as a commitment to good jobs at good wages.

Four. Ask Republican leaders to support you in disavowing the burning of the Koran and any other sacred books. Your recent remarks on this were terrific. Here is another issue that demonstrates just how lunatic-fringe a lot of Republicans have become. Force major Republicans to choose between siding with Jefferson and religious tolerance or Hitler and book-burning.

Five. Send Congress more emergency recovery legislation--job creation, aid to the states, extended unemployment benefits--and dare Republicans to vote against it. It doesn't matter if a few misguided Democrats oppose you, too. The main blockage of a stronger recovery program is the Republican Party.

Six. Propose a six month tax holiday for payroll taxes. Ask for the Republicans' support. This would provide direct tax relief to working people and lower the cost of creating jobs. It would provide more of a tonic to the economy and more practical help to American families than any of the Republicans' proposed tax cuts. Make up the loss to the Social Security trust funds with a temporary surtax on people making over $10 million a year.

Seven. Start playing hardball with Chinese mercantilism. The entire Chinese industrial system is a violation of the rules of the World Trade Organization and an assault on American jobs. Close students of trade politics have been pointing this out for decades. The New York Times just woke up to it, and put the story on page one.

Eight. Send Congress legislation for a direct program of mortgage refinancing to help innocent homeowners whacked by the fallout from the subprime scandal and the collapse in housing prices. Point out that the previous program of voluntary relief in monthly payments failed because banks refused to cooperate with it.

Nine. Devise your own program to reduce the deficit, beginning with a crackdown on offshore tax evasion and a tax on short term speculative financial trades. The louder that Wall Street screams, the better. The more the Republicans defend their banker friends, the more you identify with regular people.

Most voters begin to pay attention to mid-term elections only after Labor Day. It took Obama too long, and he still is not quite in high gear, but he is beginning to sound like the guy a lot of us voted for. More, please.

Robert Kuttner is co-editor of The American Prospect and a senior fellow at Demos. His new book is "A Presidency in Peril."