Mitt Romney

Romney's Claim To Be A Job Creator Hits The Skids

Brian Beutler | January 6, 2012, 5:30AM

Mitt Romney

Mitt Romney's effort to disguise one of his biggest political liabilities has hit a major snag -- one that may force him to abandon his most effective but misleading talking points about his work in the private sector..

Romney makes two different, but implicitly entwined claims: That while working in corporate management he created over 100,000 jobs and that -- by comparison -- Obama his presided over millions of job losses.

This is a false juxtaposition, based on two false claims. And so far, precious few reporters have pressed Romney or his campaign about it. But in the past several days, the veneer of plausibility has begun to peel leaving the candidate highly exposed to backlash from the press.

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Medicare

Ryan's Plan Still Ends Medicare Even If PolitiFact Rates That As A Lie

Brian Beutler | December 20, 2011, 11:26AM

Rep. Paul Ryan (R-WI) speaks during a press conference on the debt ceiling in Washington, D.C. on August 1, 2011

Here's a long, sad story about how Democrats' basically true claim that House Republicans voted to end Medicare ended up "winning" PolitiFact's Lie of the Year award -- a development that will help the right and the GOP create their own reality as the future of the social safety net becomes a defining issue of the 2012 campaign.

Back in April, House Republicans passed a budget that included a plan to phase out Medicare over several years and build in its place a subsidized, private insurance marketplace for seniors.

Democrats called this a vote to "end Medicare."

You can quibble. It wasn't a vote to end Medicare -- BLAM! -- all at once. But under the GOP plan, within a couple decades, the current health retirement program for old people would be gone and in its place would be an entirely different one. It would just, by political design, have the same name: Medicare.

Ignoring policy in favor of process, and with an eye toward political balance, PolitiFact rated this basically true Democratic claim "Pants on Fire."

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Economy

Economic Experts Gather In DC To Explain Why Politics Has Doomed Us

Brian Beutler | December 9, 2011, 6:00AM

Image by Mike Flippo / Shutterstock

As the U.S. government and governments in Europe respond to the global economic slump with conservative austerity measures, it's easy to forget that the overwhelming professional economic consensus is that depressed countries that can afford to should be doing the opposite -- ramping up government purchases of goods and services and putting off the budget cuts and tax increases for a few years.

This isn't even close to what's happening. And as the space between what these experts think should happen and what global elites are actually doing grows, the experts' forecast is becoming more and more pessimistic.

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Super Committee

Chart: Super Committee Dems, GOP Differ On Jobs

Brian Beutler | November 4, 2011, 5:42AM

As noted previously, the deficit Super Committee is gridlocked largely because the GOP is unwilling to accept higher taxes on wealthy people as part of a compromise with Democrats that also cuts Medicare, Medicaid and Social Security. But the parties also differ on the question of whether their recommendations should include any near term spending and/or tax cuts to give the weak economy a much-needed boost.

Recently committee Republicans and Democrats presented each other with competing plans -- some details of which were leaked to the press. Aides note that the Dem plan contained about $300 billion in expansionary measures, while the GOP plan contained... well, see for yourself.

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Defense Spending

Republicans Cry Uncle On Spending ... When Cuts Hit Home

Brian Beutler | October 28, 2011, 6:00AM

It took months of fighting -- the threat of a government shutdown, the graver threat of a default on the national debt, and now a new threat of major, automatic cuts to Medicare and defense programs -- but Congress' deficit obsession has finally exposed the rarest of all species: Republican Keynesians.

With just a under a month until the deficit Super Committee must recommend policies that cut the 10 year deficit by $1.2 trillion, members of the Republican party -- the same party that's been on the war path for deep spending cuts, and that decries President Obama's "failed stimulus" -- are making uncharacteristic arguments against slashing spending. Trim too much, too quickly, they warn, and people will lose their jobs!

Call them Defense Keynesians -- GOP members who represent defense interests, veterans, service members, contractors, and others whose livelihoods would be impacted by deep cuts to defense spending. They don't want the Super Committee to cut much more, if any, from defense, and they certainly don't want to pull the so-called "trigger" which would cut defense across the board by about $600 billion starting in 2013, if the panel gridlocks.

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Barack Obama

Economists: White House Mortgage Plan Is A Good, But Modest, Plan

Brian Beutler | October 24, 2011, 3:49PM

President Barack Obama

"We Can't Wait" is the White House's new economic rallying cry. With Senate Republicans committed to filibustering President Obama's jobs bills, and House Republicans refusing to hold votes on them, the administration is taking some steps that don't require Congress to act.

The most significant of these, announced Monday, will allow people with underwater mortgages to refinance at favorable rates if their mortgages are backed by Fannie Mae or Freddie Mac. It will expand the existing Home Affordable Refinancing Program to all underwater homeowners, leaving people with more money in their accounts every month, and thus, as David Dayen has pointed out, functioning as a de facto stimulus.

Will it move the needle on unemployment though? It depends on whom you ask, but the broad view seems to be it won't on its own fix the ailing economy. But it is expected to jack up the number of mortgage refinancings.

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Joe Biden

Biden Takes Senate Republicans To School On Tiny Millionaire's Surtax (VIDEO)

Brian Beutler | October 20, 2011, 10:19AM

V.P. Joe Biden Speaks to the Press on Capitol Hill

One reason you can expect unanimous Republican opposition to Senate Democrats' latest jobs bill Friday is because it includes a tax -- a 0.5 percent surtax on income above $1 million starting in January 2013.

That would raise enough money over the next 10 years to cover the $35 billion cost of hiring and retaining about 400,000 teachers and emergency responders next year -- but for Republicans, it's not worth it.

"This is the worst possible way to promote economic growth and job creation," warned Sen. Jon Kyl (R-AZ) -- the Senate Minority Whip, and member of the joint deficit Super Committee.

Enter Vice President Joe Biden, who at a Capitol Hill rally on Wednesday provided a lesson on just how modest the tax is.

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Stimulus

Goldman Sachs To Federal Reserve: Boost The Economy Already

Brian Beutler | October 17, 2011, 2:50PM

Economists and monetary policy wonks have been screaming about this for months -- sometimes at each other. Now economists at investment giant Goldman Sachs are on board. In a proprietary analysis for clients, Goldman economists Jan Hatzius and Sven Jari Stehn say the Federal Reserve should announce publicly that it will pursue a bit of inflation, and make good on that goal with looser monetary policy -- a new round of so-called "Quantitative Easing."

From the analysis: "[W]e believe that the Fed's most promising option for delivering significant further policy easing would be a shift to a nominal GDP level target coupled with large-scale asset purchases.

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Ben Bernanke

Congressional Dysfunction Begins To Spook Old Pros

Brian Beutler | October 10, 2011, 5:05AM

U.S. Capitol building

Congress has always been Washington's whipping boy, particularly near election time. The antics get sillier, the pace shifts from glacial to gridlock, and the frustrated public gets daily reminders that lawmakers are often too mired in politics to function in the national interest.

That's not news.

What is news is that this time it's starting to scare the pros.

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Jobs

Reid Casts Doubt On Unanimous Dem Support For Obama Jobs Bill

Brian Beutler | October 5, 2011, 1:27PM

Sen. Harry Reid (D-NV) and Sen. Charles Schumer (D-NY)

At a Wednesday Capitol press conference, Senate Majority Leader Harry Reid (D-NV) again couldn't confidently predict that President Obama's jobs bill has the support of the entire Democratic caucus -- even after leadership tweaked some of its controversial measures to broaden party support for the plan.

"I don't know what 'unanimity' means," Reid told reporters. "We'll get most all the Democrats."

Unanimity, of course, means all Democrats -- which will be important. If one or two Democrats defect from the bill, Republicans can (and will) say that the opposition to the plan is bipartisan.

There's a chance that he could unite the party, particularly after replacing Obama's proposed tax measures with a simpler five percent surtax on millionaires to pay for the jobs programs.

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Mitch McConnell

McConnell: Congressional Gridlock Is...President Obama's Fault?!

Brian Beutler | October 4, 2011, 1:36PM

Sen. Minority Leader Mitch McConnell (R-KY)

Here's a novel idea for congressional Republicans: faced with the blame for nearly three years of legislative gridlock, claim that the real fault lies with...President Obama?

Here's Senate Minority Leader Mitch McConnell (R-KY) on the Senate floor Tuesday. "The second reason the White House didn't send these agreements up sooner is that the political operators over at the White House seem to believe that they benefit from the appearance of gridlock," McConnell said. "They're over there telling any reporter who will listen that they plan to run against Congress next year. Their Communications Director said as much to the New York Times two weeks ago. So that's their explicit strategy -- to make people believe that Congress can't get anything done.

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Harry Reid

Dems Seek Unity On Obama Jobs Bill...By Changing It

Brian Beutler | October 4, 2011, 12:54PM

House Minority Whip Steny Hoyer (D-MD), Senate Majority Leader Harry Reid (D-NV) and House Minority Leader Nancy Pelosi (D-CA)

The story Republicans in the House and Senate tell right now is that President Obama is traveling the country demanding Congress vote on his jobs bill when part of the problem is here in Washington, D.C. with his own party.

It's dead on arrival as far as Republican leadership is concerned, but it also lacks unanimous support among Democrats. And since the Senate is the one body Democrats control, that's creating a bit of dissonance. Obama says vote on the bill, but Senate Majority Leader Harry Reid (D-NV) doesn't have the votes, and, if he put it on the floor today, he'd probably lose a handful or more Democrats.

That would invite Senate Minority Leader Mitch McConnell (R-KY) to reprise his oft-repeated line that the only thing bipartisan about President Obama's jobs bill is the opposition to it. And that's something Reid wants to avoid.

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China

Dems, GOP Divided Over Picking Major Economic Fight With China

Brian Beutler | October 3, 2011, 8:45AM

Chuck Schumer (D-NY)

Public anger over the weak economy and populist resentment of the developing world's role in eliminating U.S. jobs will divide both parties on Capitol Hill this week, as a coalition of Democrats and Republicans make a major push to punish China for keeping its currency artificially weak.

Led by Sen. Chuck Schumer (D-NY), the Senate is expected Monday to advance long-standing legislation intended to stop Chinese currency manipulation by making it easier for companies and workers to take legal action against illegal Chinese trade practices, and by forcing the federal government to impose economic penalties on China until Beijing allows the exchange rate between the dollar and the yuan to fall.

Economists say the yuan is undervalued by up to 40 percent -- a distortion that likely explains the massive trade imbalance between the U.S. and China, and the loss of hundreds of thousands (or more) American jobs as manufacturers set up shop there to save money. Reversing this would act as a form of monetary stimulus in the United States, and the idea is that the threat of these penalties will force China to raise the value of its currency.

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Federal Reserve

House Republicans Join Fed-Bashing Counterparts On Campaign Trail

Brian Beutler | September 22, 2011, 6:20AM

Rep. Jeb Hensarling (R-TX)

Politicians hectoring the Federal Reserve is nothing new. Members of both parties have done it based on disagreements over myriad financial and economic issue over the years. In that way Tuesday's letter from GOP leadership to Fed Chairman Ben Bernanke, warning him against pursuing more monetary stimulus, was part of a storied American tradition.

In other ways it was extraordinary. This came from leaders speaking for an entire party, and more-than-plausibly represents an effort to prevent the Fed from improving the economy for political reasons.

In the end, the effort proved ineffective -- the Fed announced a new round of monetary stimulus as expected. But it exposed a widening rift between the GOP and the Fed, which until now had been limited to posturing GOP primary candidates and fringe members of the GOP caucus.

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Ben Bernanke

Federal Reserve To GOP: Take A Hike!

Brian Beutler | September 21, 2011, 2:40PM

Federal Reserve Chairman Ben Bernanke

Responding to the bleak economic outlook, and the weak prospects for reduced unemployment in the months ahead, the Federal Reserve has announced a new round of monetary stimulus, disregarding a Republican political push to dissuade them from tinkering with the economy.

In a new iteration of Quantitative Easing -- that Fed watchers are calling "Operation Twist" -- the Federal Reserve will swap $400 billion worth of medium term bonds for longer term bonds over the next nine months,to drive down long-term interest rates to encourage immediate investment. Separately, it will take steps to drive down mortgage interest rates.

It's the first significant action the Fed has taken to juice the economy since a modest second round of monetary stimulus ended several months ago. However, the Fed says it continues to expect unemployment to drop slowly and for inflation to remain below the target rate -- meaning it isn't attempting to spur immediate spending and investment by raising the expectation that prices will soon rise. Though the hope is that the new easing will accomplish that on its own.

Politically, the action is sure to rankle Republicans, both in the presidential primary, where chairman Ben Bernanke has become a whipping boy, and on Capitol Hill, where leaders have more cautiously criticized Fed policy.

Read the full Fed statement below the fold.

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Ben Bernanke

GOP Leaders To Bernanke: Don't Try And Improve The Economy Again

Brian Beutler | September 21, 2011, 8:59AM

House Speaker John Boehner (R-OH) with Senate Minority Leader Mitch McConnell (R-KY)

House and Senate GOP leadership are taking fire from all sides for publicly pressuring Federal Reserve chairman Ben Bernanke not to further loosen monetary policy, even if he thinks it will help the economy.

In a Tuesday letter to Bernanke, leaked to the press, Sens. Mitch McConnell (R-KY) and Jon Kyl (R-AZ), and House Speaker John Boehner (R-OH) and Majority Leader Eric Cantor (R-VA), ostentatiously cautioned Bernanke against providing the economy any further monetary stimulus.

"[W]e submit that the board should resist further extraordinary intervention in the U.S. economy, particularly without a clear articulation of the goals of such a policy, direction for success, ample data proving a case for economic action and quantifiable benefits to the American people," the Republicans write.

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Barack Obama

Pelosi: Dem Opposition To Obama Jobs Plan Trivial

Brian Beutler | September 15, 2011, 12:25PM

House Minority Leader Nancy Pelosi (D-CA)

House Minority Leader Nancy Pelosi (D-CA) on Thursday said Democrats overwhelmingly support President Obama's jobs bill, despite opposition from a handful of loud party conservatives.

"Let me just say that what you're suggesting is anecdotal. ... the plural of anecdote is not data," Pelosi said in response to TPM's question at her weekly Capitol press conference. "Our caucus is very unified in support of the American Jobs Act and the fact that it is paid for. It may differ with some provisions within it, or the pay-fors, but they do not differ in the fact that we must get behind it."

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Super Committee

Super Committee GOP Unconvinced By CBO Chief On Jobs, Austerity

Brian Beutler | September 15, 2011, 6:10AM

Rep Dave Camp (R-MI) and House Speaker John Boehner (R-OH)

So did CBO Director Doug Elmendorf make any headway convincing Super Committee Republicans that a). the economy needs a short term boost of near term spending and tax cuts, and b). that the country shouldn't dive headlong, and unnecessarily, into austerity?

If Dave Camp is any indication, the answer is no.

The Michigan Republican, and chair of the House Ways and Means Committee said he disagreed with Elmendorf's cautionary testimony.

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Super Committee

Super Committee Riven By Major Divide Over Basic Facts

Brian Beutler | September 14, 2011, 5:59AM

Rep. Jeb Hensarling (R-TX)

Political debates over deficits and debt are always marked by obfuscation and technicality. The numbers are huge and frightening, the terms obscure and technical, and the simple, fundamental point of the argument gets buried underneath this avalanche of panic and esoterica.

But for a brief moment Tuesday, under questioning from Sen. Max Baucus (D-MT), Congress' top economic analyst made it perfectly clear to everybody who was listening.

"I think really the fundamental question for you is not how we got here, but where you want the country to go, what role do you and your colleagues want the government to play in the economy and the society?" said Doug Elmendorf, who heads the Congressional Budget Office. He was addressing the six Democrats and six Republicans on the new joint deficit committee, and for three hours he did his best not to get buried under the same avalanche.

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Super Committee

CBO Chief Gives De Facto Boost To Obama Jobs Plan

Brian Beutler | September 13, 2011, 2:36PM

CBO Director Doug Elmendorf

The Congressional Budget Office would be stepping out of bounds if it endorsed specific legislation or even hazy policy objectives. But it's hard to read CBO chief Doug Elmendorf's testimony to the joint deficit Super Committee Tuesday as anything other than a de facto endorsement of President Obama's broad strategy to boost the economy: legislation that spends money to hire people and reduces payroll taxes in the near-term, and that reduces deficits by even greater amounts in the middle and end of the decade.

"If policymakers want to achieve both a short-term economic boost and long-term fiscal sustainability the combination of policies that would be most effective according to our analysis would be changes in taxes and spending that would widen the deficit today, but narrow it in the coming decade," Elmendorf told the panel's 12 Democrats and Republicans. "The combination of fiscal policies that would be most effective would be policies that cut taxes or increase spending in the near-term, but over the medium and longer-term move in the opposite direction."

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Super Committee

Over GOP Objections, Budget Hawks Say Super Committee Should 'Go Big'

Brian Beutler | September 13, 2011, 5:57AM

President Barack Obama President, with Erskine Bowles (left) and Sen. Alan Simpson (right.)

Democratic and Republican members of the joint deficit Super Committee will meet Tuesday for their first substantive meeting, which will examine the history and driver of the country's debt, and the risk it poses in the future.

It will be the committee's second meeting overall and its first since President Obama pushed the panel in his joint address to Congress to find significantly more than the $1.2 trillion in deficit reduction they're required to find, to finance a near-term jobs bill.

That pressure has some Republicans saying that Obama's needlessly complicated the committee's task -- finding $1.2 trillion in cuts, revenues and savings is hard enough! -- and members should keep their eyes on the more modest goal spelled out in the debt limit law.

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Jobs

Cantor To Obama: Let's Nix More Than Half Your Jobs Bill

Brian Beutler | September 12, 2011, 1:59PM

House Minority Whip Eric Cantor (R-VA)

This post was updated at 4:26 p.m.

How much of President Obama's jobs bill is DOA in the House? According to Majority Leader Eric Cantor (R-VA), probably about half of it.

"Anything that is akin to the stimulus bill I think is not going to be acceptable to the American people," Cantor told reporters at his weekly Capitol briefing Monday. "I don't believe that our members are going to be interested in pursuing that. I certainly am not."

Cantor's talking about federal spending here. He has come out in favor of an alternative plan to expedite high-impact infrastructure building, by ending requirements the federal government places on surface transportation funds, and allowing states to reprioritize the money. But this plan would involve no new federal spending, and there remain significant differences between GOP leadership and the White House over how to fund new projects.

Separately, the stimulus bill wasn't nearly all spending. About a third of its cost came from the very sort of tax cuts and credits that Obama's new jobs bill contains, and Republicans are more likely to support. Another big chunk of the $787 billion price tag came from an un-stimulative patch that Congress passes every year to prevent the Alternative Minimum Tax from ensnaring middle class taxpayers.

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Barack Obama

Boehner To Obama: Thanks For The Jobs Plan -- Let's See How Much It Really Costs

Brian Beutler | September 12, 2011, 11:34AM

House Speaker John Boehner (R-OH)

Reflecting the GOP leadership's new kinder, gentler, less partisan rhetorical tone, House Speaker John Boehner (R-OH) says he appreciates President Obama's new jobs legislation, despite continuing policy differences between the parties. Obama's not being quite so gentle, barnstorming the country and seizing the airwaves demanding Congress "pass this bill." The GOP can't just sweep the bill into the dustbin under such circumstances, so the question is how exactly will they operate the sausage maker.

Boehner's statement offers some clues. "[W]e appreciate the President's pledge to transmit legislation to Congress and will immediately request that it be scored by the Congressional Budget Office," Boehner said. "Once we receive CBO's analysis, we can begin the important work of reviewing the various elements of his proposal."

This is a far cry from the "hell no you can't!" days of health care reform. But there are booby traps.

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Jobs

Cantor Demurs On Whether Super Committee Should Focus On Jobs

Brian Beutler | September 7, 2011, 3:32PM

House Minority Whip Eric Cantor (R-VA)

President Obama wants Congress to pass his jobs plan, and Democrats think the new deficit Super Committee is the appropriate venue for those initiatives. If creating jobs costs money in the near term, the Committee could simply offset those cuts with additional long-term deficit savings, beyond the $1.2 trillion floor required by the debt ceiling law.

But Republicans aren't sold. I asked House Majority Leader Eric Cantor (R-VA) whether this would be an appropriate course of action for the Joint Committee -- new jobs spending now, more deficit cuts later. He demurred.

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Barack Obama

Obama's Biggest Challenge Thursday, One Of His Own Making

Brian Beutler | September 7, 2011, 9:10AM

President Barack Obama

Barack Obama will face a daunting challenge Thursday evening when he attempts to focus the government's attention away from consolidating the federal budget, and back on to immediate job creation. Here's a partial list of hurdles: Republicans oppose all new spending, unless it's offset by cuts to key federal programs; they oppose most of the specific spending measures that experts say would create jobs; many Democrats, scared of their own shadows, won't support anything that doesn't have bipartisan support; the public has soured on Keynesian spending policies, and particularly the word "stimulus"; and the White House, quite understandably, doesn't want to be left fighting for a policy that voters oppose from the outset.

To put things in starker relief, no less than his presidency and the economic fate of millions of Americans is at stake.

That's a tall order -- but it is, in part, one of Obama's own making.

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Debt

McConnell: Obama Jobs Plan Will Be 'Same Failed Approach'

Brian Beutler | September 7, 2011, 6:05AM

Mitch McConnell (R-KY)

Congress returned to Washington on Tuesday, which gave Republicans their first national whack at President Obama since public anger over the debt limit fight boiled over, and details of his jobs plan started to leak, and he nixed a forthcoming pollution regulation at the behest of Republicans and conservative business interests.

Who better to wield the truncheon than Senate Minority Leader Mitch McConnell (R-KY), who perhaps unwittingly affirmed a recent, widely cited critique of the GOP, written by a 30 year Republican Capitol Hill vet.

"[E]very one of us, I'm sure, is aware of the fact that many Americans are not only frustrated with the state of our economy, but also with the state of their government," McConnell said on the Senate floor. "I don't think any one of us is under any illusion that the American people were particularly eager to see us come back."

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Jobs

Angry House Dems Request Pre-Speech Meeting With Obama

Brian Beutler | September 6, 2011, 6:40PM

Rep. Raul Grijalva

The chairs of the Congressional Progressive Caucus and of the three caucuses of black, Hispanic and Asian members of the House would like a word with President Obama before his Thursday jobs address.

In a Tuesday letter provided by a source, the leaders, who speak for a majority of House Dems, sought to make sure that Obama keeps his eye on the jobs crisis, which has disproportionately hit minority groups.

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Super Committee

Super Committee Democrats Want More Deficit Reduction

Brian Beutler | September 6, 2011, 4:06PM

Rep. Chris Van Hollen (D-MD)

The key dilemma facing President Obama and Congressional Democrats is that Republicans are wholly unwilling to support any new job-creating spending projects -- even projects with bipartisan support -- unless they're offset with spending cuts or savings elsewhere in the budget.

Thus, Democrats on the new joint deficit Super Committee will seek more than the $1.5 trillion in deficit reduction they've been tasked with finding, in order to help offset some of those costs.

"All of us would like to set as a target for ourselves even more than $1.5 trillion," Rep. Chris Van Hollen (D-MD), who's also the top House Democrat on the Budget Committee, told reporters at a Tuesday Capitol press conference.

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Jobs

What The Media Won't -- Or Can't -- Tell You About The Jobs Crisis

Brian Beutler | September 6, 2011, 6:10AM

An unemployed man.

Everyone knows the unemployment rate is painfully high and not falling. Friday's monthly jobs report from the Department of Labor put a cruel point on this fact: In August, job gains in the private sector were entirely offset by job losses in the public sector, netting precisely zero new payrolls for the month.

Zero is a striking number in this context, but it's also a bit misleading. For instance, private sector job creation appeared artificially lower than it should have because 45,000 Verizon workers were on strike when the survey was taken. What happened in August has been happening for months, as policy makers allow federal spending to fall and, thus, for government jobs to disappear, placing a significant drag on overall growth.

Experts disagree to some extent over the precise measures lawmakers should take to stanch this bleeding -- but overwhelmingly they agree it can be stanched. Their recommendations give the lie to the idea -- pushed by conservatives and adopted by some Democrats -- that government is growing out of control and deficits need to be addressed urgently. And yet nearly all major news outlets ignore, or bury this fact -- indeed, most reports of this month's jobs figures place no emphasis on the contraction of the public sector, and the implications thereof.

Here's a sample.

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Ben Bernanke

Bernanke Slams Congress For Harming Economy With Debt Limit Brinkmanship

Brian Beutler | August 26, 2011, 10:48AM

Federal Reserve Chairman Ben Bernanke

In a speech that sent stock prices tumbling, Fed Chairman Ben Bernanke announced the central bank will not take bold new steps to stimulate the economy -- at least not yet. But he also ripped Congress for failing to do its part to combat unemployment with fiscal policy, and blamed brinkmanship over the debt limit for exacerbating the situation.

"Bouts of sharp volatility and risk aversion in markets have recently re-emerged in reaction to concerns about both European sovereign debts and developments related to the U.S. fiscal situation, including the recent downgrade of the U.S. long-term credit rating by one of the major rating agencies and the controversy concerning the raising of the U.S. federal debt ceiling," Bernanke said at an annual Fed symposium in Jackson Hole, Wyoming. "The negotiations that took place over the summer disrupted financial markets and probably the economy as well, and similar events in the future could, over time, seriously jeopardize the willingness of investors around the world to hold U.S. financial assets or to make direct investments in job-creating U.S. businesses."

Don't do that again, he's warning. Except that top Republicans now say taking the debt ceiling hostage will be the new normal.

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CBO

Worse Than It Looks: CBO Says Economic Outlook More Dire Than Reported

Brian Beutler | August 24, 2011, 10:52AM

CBO Director Doug Elmendorf

Partisans will surely find things to love and hate about CBO's updated economic outlook. It projects that the 2011 deficit will be lower than the last two years' deficits, but still near record highs. It forecasts a slow but steady economic recovery over the next six years. And it makes clear that the country's medium-term fiscal imbalances are manageable unless lawmakers decide to screw things up.

But there's also a major, major caveat.

"CBO initially completed its economic forecast in early July, but it updated the forecast in early August to reflect the policy changes enacted in the Budget Control Act [the debt limit deal]," the report reads. "However, the forecast described here does not reflect any other developments since early July, including the recent swings in financial markets, weakness in certain economic indicators, and the annual revision to the national income and product accounts. Incorporating that news would have led CBO to temper its near-term forecast for economic growth."

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Rick Perry

CHART OF THE DAY: *Government* Jobs Led To Perry's Economic Boom

Brian Beutler | August 17, 2011, 2:23PM

Gov. Rick Perry (R-TX)

On the campaign trail, governor Rick Perry will claim credit for the so-called Texas miracle. His state weathered the housing and jobs crises better than many others, and he'll happily tell voters it was the result of his small government conservative approach to running things.

But his state's relative success has a lot to do with things out of his control -- population growth resulting from an influx of immigrants from Mexico and of workers and retirees from other U.S. states, and high oil company profits, to name just a couple. Oh, and also federal stimulus.

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Stimulus

Cut And Grow Fail: CBO Schools Tea Party Freshman In Basic Economics

Brian Beutler | August 11, 2011, 3:15PM

Rep. Tim Huelskamp (R-KS)

This story was updated at 4:40 p.m. to include text from Huelskamp's letter

Rep. Tim Huelskamp (R-KS), a Tea Party-backed freshman who voted against the final debt limit bill, recently asked to hear from the Congressional Budget Office about the impact of government spending on economic growth. It's an article of faith on the right that vastly shrinking government will unleash the forces of private enterprise, and faced with CBO's opposing view, Huelskamp wanted to know the answer to two questions:

1). What current federal departments, agencies, programs, or portions thereof do not contribute to economic growth?

2). In the programs that CBO believes do contribute to economic growth, what level of spending cuts would amount to a level you believe would be significant enough to "probably slow the economic recovery"?

But if the newly elected member of the Budget Committee was hoping the non-partisan CBO would buy into his premise, he'll be sorely disappointed.

In a response letter Thursday, CBO-chief Doug Elmendorf gives Huelskamp a layman's lesson in Keynesian economics: Under current economic circumstances, new federal spending would help economic growth, and current and future cuts could stymie it, particularly if they hit key government investment.

"When demand for goods and services falls short of the economy's ability to produce them, as is the case currently, increasing government spending can increase aggregate demand and thereby narrow the gap between the economy's actual and potential levels of output," Elmendorf writes.

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2012

Despite Rhetoric, Bachmann Requested Stimulus, EPA Cash For District

Benjy Sarlin | August 10, 2011, 11:16AM

Michele Bachmann

For Michele Bachmann federal cash is absolutely disgusting -- and the portions are so small!

Despite repeatedly decrying the evils of federal spending, records obtained by the Huffington Post show Bachmann repeatedly requested money for her district even from agencies and programs she has vilified in her speeches. They include the stimulus program that she branded "fantasy economics" as well as the Environmental Protection Agency she's said should be renamed the "Job Killing Agency."

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Barack Obama

Former Top White House Economist: One-In-Three Chance Of Double-Dip Recession

Brian Beutler | August 3, 2011, 10:39AM

Larry Summers and President Barack Obama

For the umpteenth time in the last two years Democrats are going to "pivot to jobs." This time, according to President Obama's former chief economist, they better be serious.

In a Wednesday Washington Post op-ed, Larry Summers issues his most dire public warnings about the economy since leaving the White House.

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Debt Ceiling

The Four Big Problems With -- And Four Silver Linings Around -- The Debt Limit Deal

Brian Beutler | August 1, 2011, 11:00AM

President Barack Obama

Progressives are furious. Conservatives are somewhat less furious. And for the most part all anybody knows about the budget plan is that it cuts a lot of spending over 10 years, and includes no guarantees that anybody -- particularly the well-off -- will pay more in taxes. Thus, the anger: after huge tax cuts for the rich, two unfunded wars, and a financial crisis triggered by Wall Street greed exploded budget deficits, the people asked to narrow the gap are overwhelmingly regular folks.

All of this while the economy is still reeling. It might not be as bad as this, but there's certainly a lot missing here.

So with that background in mind, here are the four worst problems with, and four silver linings around the debt limit deal.

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Stimulus

Republicans Falsely Claim Obama Advisers Burying Data 'Proving' Stimulus Is Hurting Economy

Brian Beutler | July 5, 2011, 2:51PM

House Speaker John Boehner (R-OH)

Republicans are citing data from President Obama's Counsel of Economic Advisers to argue that the stimulus has cost the economy nearly 300,000 jobs in the past few months.

The claim originated Sunday at the conservative Weekly Standard and has quickly mushroomed into a talking point: It's been cited already by both Douglas Holtz-Eakin -- an influential Republican economist -- and House Speaker John Boehner. And it supposedly explains why the White House unveiled the report on the Friday before a holiday weekend.

There's just one problem: it's false.

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Chuck Schumer

Is The GOP Sabotaging The Economy? Schumer: 'They Give Us No Choice But To Answer Yes'

Brian Beutler | July 1, 2011, 12:49PM

Sen. Chuck Schumer (D-NY)

To a casual observer's eyes, Sen. Chuck Schumer (D-NY) is flogging a dead horse. He keeps hinting that the GOP is intentionally try to damage the economy or forestall recovery because it will improve their election chances in 2012. But he also keeps inching closer to outright declaring it.

He took another step in that direction Friday. On a conference call Friday morning, another reporter asked Schumer whether he believes the GOP's committing sabotage (my words, not the reporter's). Here's his response.

"It's a thought you just don't want to believe in, because that would be [horrible]," Schumer said. "But every day they keep giving us more and more evidence that there's no choice but to answer the question 'yes.' They give us no choice but to come to that conclusion."

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2012

Romney: OK, Maybe Obama Didn't Make The Recession 'Worse'

Benjy Sarlin | July 1, 2011, 12:02PM

Mitt Romney

Mitt Romney walked back his oft-repeated claim that President Obama made the recession worse, telling reporters in Pennsylvania on Thursday that he never meant to suggest any such thing.

Asked by NBC how he squared his claim that Obama worsened the lousy economy he inherited given that the stock market has surged, unemployment is down from its peak, and the economy is no longer shrinking, Romney demurred.

"I didn't say that things are worse," he said. He went on to make the case that Obama had failed to do enough on jobs, a much less inflammatory claim.

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Debt Ceiling

Schumer: Republicans' 'Slash-And-Burn' Policies May Be Effort To Sabotage Economy

Brian Beutler | June 30, 2011, 9:28AM

Sen. Charles Schumer (D-NY)

In a blistering Thursday morning speech at the Economic Policy Institute -- a progressive think tank -- Sen. Chuck Schumer (D-NY) asked a question that's been on the minds of many Democrats and progressives: Are Republicans sabotaging the economic recovery as part of their quest to defeat President Obama next year?

"[W]e need to start asking ourselves an uncomfortable questions -- are Republicans slowing down the recovery on purpose for political gain in 2012?" Schumer said. "Senator McConnell made it clear last October that his number one priority, above everything else, is to defeat President Obama. And now it is becoming clear that insisting on a slash-and-burn approach may be part of this plan -- it has a double-benefit for Republicans: it is ideologically tidy and it undermines the economic recovery, which they think only helps them in 2012."

Schumer -- the third ranking Democrat in the Senate and the party's top political strategist -- has been inching in this direction ever since Republicans trotted out new-found opposition to a payroll tax cut for business owners. But the Thursday speech constituted an escalation of his strategy. And, in a new twist, he pre-emptively saddled Republicans with blame for economic fallout of a debt default if Congress fails to raise the debt limit in a timely fashion.

"If the public comes to believe that Republicans are deliberately sabotaging the economy, it will backfire politically," Schumer said. "If there are any negative repercussions on the economy resulting from the delay in raising the debt ceiling, Republicans rightly fear that Americans will hold them responsible."

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