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By

Gail Russell Chaddock,

Washington (CNN) — The Obama administration will push for letting tax cuts for wealthy Americans expire while extending them for the rest of the nation, Treasury Secretary Tim Geithner said.

In interviews broadcast Sunday on ABC and NBC, Geithner called for a balanced approach as the economy recovers from the recession that started in 2008 while facing mounting federal debt.

That means pushing for measures designed to raise revenue, such as letting tax breaks from the Bush administration expire for families earning more than $250,000 a year while holding down spending and taking steps to encourage private sector job creation, Geithner said.

“We’re in a transition … from the extraordinary actions the government had to take to break the back of this financial crisis to a recovery led by private demand,” Geithner told the NBC program “Meet the Press”. “That transition is well under way. It’s going to continue and it’s going to strengthen.”

Along with letting the tax cuts for the wealthy expire, the administration also wants to “leave in place tax cuts that are very important to incent businesses to hire new employees and to invest and expand in output,” Geithner said on the ABC program “This Week.”

Republicans say letting tax cuts expire for wealther Americans will hurt economic growth as the nation recovers from the recession. In particular, GOP critics say the $250,000-a-year threshold means many small business owners would be included in the group seeing their tax burdens increase when the cuts expire at the end of 2010.

“The safest thing for America would be to have a provision passed this fall that said no tax increase of any kind in 2011,” former House Speaker Newt Gingrich, a possible Republican presidential candidate in 2012, said on the “FOX News Sunday” program. “Everywhere I go — and I’ve been in 10 states in the last 14 days — business people say to me over and over again, ‘I will create no new jobs in this environment because the uncertainty is too frightening.’ “

Geithner said the plan is to extend the tax cuts for more than 95 percent of country while letting them expire for about 3 percent, which he called the “highest-earning Americans.”

Asked on the ABC show if letting any tax cuts expire would harm the recovery, Geithner said: “I do not believe it will have a negative effect on growth.”

“We think that’s the responsible thing to do,” Geithner said. “We need to make sure we can show the world that we’re willing as a country now to start to make some progress bringing down our long-term deficits.”

Video: Bush tax cuts: Time to expire?

Video: Have Dems’ econ policies failed?

Video: Obama’s economic plan

Overall, he said, the government was “making progress” in restoring private sector job growth.

“I think the most likely thing is you see an economy that gradually strengthens over the next year or two,” Geithner said on NBC. “You see job growth start to come back again; and again, investment expanding, manufacturing is getting a little stronger, exports better. Those are very encouraging signs. But we’ve got a long way to go still.”

President Barack Obama’s poll numbers for his handling of the economy have dropped into unfavorable territory, and Republicans have hammered the administration over continuing high unemployment despite last year’s $787 billion economic stimulus bill. Last week, the administration said it expects unemployment to remain above 9 percent through 2011.

Geithner said the government is moving from the emergency steps enacted to deal with the recession — such as bailing out big banks and automakers — to more long-term approaches for helping the private sector create jobs.

On NBC, he called completing projects under the stimulus bill and enacting proposals to help small businesses and teachers “sensible, good steps,” adding that the main goal is to “make this transition to a recovery led by private companies.”

“We have to make some choices, too, and we have to make sure we can continue to earn confidence around the world that we’re going to have the will as a country to bring these large inherited deficits down over time to a much more manageable level,” Geithner said.

Geithner: Let tax cuts for rich expire

By

Howard LaFranchi,

Washington (CNN) — If anyone doubted whether campaigning had started for the mid-term congressional elections in November, the answer became clear on Sunday.

Democratic and Republican politicians rolled out their main campaign themes on morning talk shows less than four months before voters will decide races for all 435 House seats and at least 36 of the 100 Senate posts.

West Virginia could decide to hold a special election in November to fill the seat of the late Democratic Sen. Robert Byrd, which would put 37 Senate seats in play.

To Republicans, the election is about halting the free-spending policies of a Democratic-controlled White House and Congress. For Democrats, the choice for voters is between moving forward to tackle tough issues or going back to failed GOP policies of the past.

While Democrats repeatedly invoke the crippling recession and increased deficits of the Bush administration, Republicans say the problem now is how the majority party forces through unpopular and irresponsibly expensive legislation.

“How long can the other side run against the previous administration?” asked Senate Minority Leader Mitch McConnell, R-Kentucky, on the CNN program “State of the Union.” “They’ve been in charge now for a year and a half. They’ve been on a gargantuan spending spree.”

On the same show, House Majority Leader Steny Hoyer, D-Maryland, shot back that the nation needs to progress rather than boomerang.

“What we’re going to focus on is not returning to the failed Bush policies that brought us to this point, but focus on the efforts that we have made which are making progress,” Hoyer said. “We haven’t succeeded yet, but we are making substantial progress. The economy is growing. We are creating jobs.”

Video: Hoyer talks about high anxiety of U.S.

Video: McConnell explains his ‘groove’ comment

Democrats conceded that the slow economic recovery, with unemployment still above 9 percent, continues to rankle voters upset with the entire Washington establishment. However, both Hoyer and Vice President Joe Biden took aim at GOP calls to repeal major reform bills of the past year — the health insurance overhaul and increased Wall Street regulations — and replace them with less comprehensive proposals.

“Very frankly, we think that when Americans assess, ‘Do we want to go back; do we want to, in fact, repeal the successes we’ve had and repeat the mistakes that we’ve made that got us to this point,’ I think they’re going to say, no, they don’t want to go back to the Bush policies,” Hoyer said.

Appearing on the ABC program “This Week,” Biden complained of Republican efforts to obstruct any progress under President Barack Obama.

“There is the reality of whether or not the Republicans are willing to play, whether or not the Republicans are just about repeal and repeat the old policies or they’re really wanting to do something,” Biden said.

McConnell and other Republicans made no apologies.

“What we are proud to say ‘no’ to, and I think what the public wants us to say ‘no’ to, are things like the government running banks, insurance companies, car companies, nationalizing the student loan business, taking over our health care,” he said.

His GOP ally in the House, Rep. Mike Pence of Indiana, told “Fox News Sunday” that people don’t want all the costly reform legislation pushed by Democrats.

“All we’re getting from the Democratic majority in Congress and from this White House is more bailouts, more spending, more planned stimulus, more deficits and debt, and the American people have had it,” Pence said.

On the NBC program “Meet the Press,” Republican Rep. Pete Sessions of Texas blamed the nation’s economic woes dating to the previous administration on House Speaker Nancy Pelosi, D-California, who became the nation’s first woman House Speaker in 2006.

“It is because Speaker Pelosi has been in charge for four years and denied (former President George W. Bush) the ability to continue doing what was successful in this country, and that is making the free enterprise system not only more powerful but competitive with the world,” Sessions said, later adding: “Today it’s about empowering government, and that is a mistake.”

Democrats, however, said Republicans are simply opposing whatever Obama and their party’s congressional leaders propose without offering any substantive alternatives. With primaries for November determining specific candidates, they say, the stark differences offered voters will become more apparent.

“The most vulnerable time any public official finds himself is in when they have no opponent,” Biden said, noting how Senate Majority Leader Harry Reid, D-Nevada, was thought to be in trouble until the Republican primary chose extreme conservative Sharron Angle to face him. Reid now holds a lead in the latest polling.

“I know my Republican colleagues would like to have everybody forget that their candidates are on the ballot, but their candidates will be on the ballot,” Sen. Robert Menendez, D-New Jersey, said on the NBC program. “And it’s not just talking about President Bush; it’s the policies that they espouse that are in essence Bush’s policies.

On the same show, Democratic Rep. Chris Van Hollen of Maryland said Republicans “want to get away, essentially, with carping and whining about everything here without telling the American people what they will do.”

He singled out the House Republican leader, Rep. John Boehner of Ohio, as an example of what the opposition seeks to do.

Boehner “just this week said that he’s going to move to repeal the Wall Street reform bill,” Van Hollen said. “Now, Wall Street lobbyists have been working very hard to try and defeat that Wall Street reform bill. “And what he is saying is, ‘Just wait. If I have the opportunity, I’m going to take care of it for you.’ So it’s that kind of thing that’s going to make it clear to the American people what kind of choice they have.”

However, GOP Sen. John Cornyn of Texas, also on the NBC program, said the public wants “checks and balances” in Washington.

“They’ve had single-party government, and it’s scaring the living daylights out of them,” Cornyn said, citing the health care reform bill as example. Asked what would happen with Republicans back in power, Cornyn said: “I think repeal and replace it with a common-sense solution.”

November election campaign in full swing

Washington (CNN) — Republicans wasted no time Thursday in calling out President Obama and Democrats for their handling of the economy, warning the country should not follow the Democratic Party down the road to ruin.

“It is time this administration and its Capitol Hill ally stop this job-killing agenda,” Sen. Orrin Hatch, R-Utah, said at a press conference with other Republican senators.

Obama is simply “out of touch with the American people and out of touch with the economic realities of our country in the summer of 2010,” said Sen. John Barasso, R-Wyoming.

The Obama administration is fighting back, touting Wednesday’s economic stimulus report, which says the government paid out the largest chunk of stimulus funds so far in the second quarter of 2010 — $116.3 billion — which includes both spending on projects and tax cuts to businesses.

The administration said the the $787 billion stimulus is working and has already saved or created about 3 million jobs. Obama is now calling this the “Summer of Recovery.”

Republicans, meanwhile, argue that the 9.5 percent unemployment rate is evidence that the country is not seeing a “Summer of Recovery.”

The top GOP leader in the House is also targeting the Wall Street Reform Bill, which is expected to be passed by the Senate Thursday.

Video: ‘I think we’ll retain House,’ Gibbs says

Video: Battle for the house

House Minority Leader John Boehner said he liked some things about the bill.

“There are common sense things that you should do to plug the holes in the regulatory system that were there, and to bring more transparency to financial transactions, because transparency is like sunlight. Sunlight is the best disinfectant.”

But Boehner still thinks the bill should be repealed because it is “ill-conceived” and will “make credit harder for the American people to get, clearly harder for businesses to get and … punish every banker in America for the sins of the few on Wall Street.”

Pelosi’s spokesman Nadeam Elshami immediately slammed Boehner’s comments in a statement, saying “This comes as no surprise coming from the Republican House leader who called the financial crisis that caused 8 million Americans to lose their jobs an ‘ant.’ “

In addition to the economy, Republicans are smelling blood in the wake of recent comments made by White House Press Secretary Robert Gibbs on the midterm election.

Gibbs said on Sunday that he thinks there is “no doubt there are enough seats in play — that could cause Republicans to gain control.”

The comments were blasted by top Democrats, including House Speaker Nancy Pelosi and Majority Leader Steny Hoyer — and seized on by Boehner.

“The panic that’s building amongst Democrats erupted into a full scale civil war this week when the president’s spokesman suggested that his party could lose the House this fall,” Boehner said Thursday. “I understand that the House Democrats are angry because they see the White House throwing them under the bus.”

“With all the trouble the House Democrats are in right now, [it] was really only a matter of time before the gloves came off. I just didn’t know that the targets would be each other,” he said.

Pelosi and others expressed frustration over Gibbs’ comments which were seen by some as helpful to Republicans, according to senior Democratic officials.

It’s one thing for a pundit to state the obvious about the state of play in the election and quite another for a top White House official to offer an assessment that may depress the party’s base just as officials hope to start revving liberals up, the officials said.

Many lawmakers also said that after expressing their frustration, they now want to turn the page and did not plan to rail against the president himself, a senior administration official told CNN.

The White House is also feeling the heat from liberal Democrats who say Obama has not been aggressive enough in pursuing their agenda.

Obama senior adviser David Axelrod responded to those critics Sunday on CNN’s State of the Union. “My admonition would be: Don’t make the perfect the enemy of the good,” he said.

“We’ve achieved more in these two years — in terms of advancing a solid progressive agenda for this country that will help working families and make this a better, more balanced economy — than anyone has done … in our generation.”

He pointed to comprehensive health care reform, the administration’s move to boost fuel efficiency standards and the president’s desire to repeal the “don’t ask, don’t tell” policy on gays and lesbians serving in the U.S. military, as part of that agenda.

But those legislative items are also providing fodder for Republicans.

Senate Minority Leader Mitch McConnell, speaking on Thursday to a group of young Republicans, said the midterm election will be a referendum on those policies.

“You’re here at a time of the explosion of government,” McConnell said. “The people who think what’s wrong with America is that we just haven’t gotten a big enough government … we’re going to have an opportunity to see how the American people feel about that in a few months, because they’ll get their report card.”

CNN’s Martina Stewart and Deirdre Walsh, along with CNNMoney.com’s Annalyn Censky, contributed to this report.

Republicans blast Obama amid Democratic Party tension

Washington (CNN) — House Democratic leaders met with President Barack Obama on Wednesday night to discuss legislative priorities in the run-up to the November mid-term election, but one topic was bypassed — the weekend assessment by White House Press Secretary Robert Gibbs that Republicans could win back the chamber.

Aides to the House Democratic leaders told CNN that the meeting with Obama was productive and focused mostly on economic issues and policy. One leadership aide said Obama declared the Democrats would retain control of the House in November, but there was no mention in the meeting of the remark by Gibbs.

Earlier, senior Democratic officials said that at a private Capitol Hill meeting on Tuesday night, a string of House Democrats — including House Speaker Nancy Pelosi — expressed deep frustration that Gibbs had played into Republicans’ hands by answering a hypothetical question on NBC’s “Meet the Press” about whether Democrats may lose their grip on power.

In a statement that senior White House officials maintain was blindingly obvious and really not newsworthy, Gibbs said on Sunday, “I think there is no doubt there are enough seats in play — that could cause Republicans to gain control.”

The senior Democratic officials said it’s one thing for a pundit to state the obvious about the state of play in the election and quite another for a top White House official to offer an assessment that may depress the party’s base just as officials hope to start revving liberals up.

“Members were hot — hot, hot, hot,” one senior Democratic official told CNN about the private meeting Tuesday where House Democrats directed their anger at Dan Turton, a White House aide who attended the session.

A senior administration official acknowledged to CNN there was heavy tension at Tuesday’s congressional meeting, but stressed that many lawmakers also said that after expressing their frustration they now want to turn the page and did not plan to rail against the president himself at Wednesday night’s meeting at the White House with Pelosi and other leaders including Majority Leader Steny Hoyer of Maryland and Majority Whip Jim Clyburn of South Carolina.

Several House Democrats offered a similar message.

Rep. Chris Van Hollen, the Democratic Congressional Campaign Committee chairman, took a jab at Gibbs on Wednesday when he told reporters that “people need to be aware of how their comments will be interpreted in a political environment.”

Later, in an interview with CNN, Van Hollen stressed the need to move past the comments by Gibbs.

“There is no upside to this and we need to get beyond this and focus less on what the president’s spokesman said on a news show and focus on what the Republicans say they will do if they get control of the House,” said Van Hollen, of Maryland. Republicans are asking voters “to send back the same guys who got the economy in the ditch to begin with,” he said.

Hoyer said Democrats need to get on the same page when they meet with Obama.

“I think our message to the president is we need to be speaking obviously on message from the White House, and from the House, and I think we need to be focused on what we’ve done to create jobs and move the country forward,” Hoyer said, repeating his comment Tuesday that “we’re going to maintain control of the House so I think any conclusion other than that is incorrect.”

Meanwhile, House Republican Leader John Boehner described the chamber’s Democratic caucus as “in chaos,” but acknowledged Republicans have “a steep hill to climb to get to the majority.”

“We’ve got a lot of work to do, but it is possible,” said Boehner, of Ohio.

Dina Titus, a first term Democrat from Nevada and a top target of Republicans, told CNN she hoped the party spat would “get Democrats all enthused and they turn out even more because these are tough races.”

But she also sought to distance herself from the White House and top Democrats, saying: “We’re just running our own race. I’m not Obama. I’m not Reid. I’m Dina Titus and that’s what we’re focusing on.”

Gibbs, on Wednesday at his White House briefing, sought to ease some of the tension by saying Pelosi’s efforts have been “monumental” on behalf of the president’s agenda. He also reiterated that his original comments on Sunday were meant to rally the party into coming together on showing voters there will be a sharp contrast between the Republican and Democratic agendas in November.

“On that choice we will do very well,” said Gibbs, adding that he believes Democrats will keep control of both the House and Senate.

Nevertheless, Gibbs’ comments sent alarm bells through the upper echelons of the Democratic party, especially because Van Hollen’s Democratic Congressional Campaign Committee has a long-planned breakfast meeting Thursday with lobbyists who are key party fundraisers.

The committee, which is in charge of helping to elect House Democrats, had been hoping to project momentum in advance of Friday’s deadline to publicly reveal fundraising numbers for the first six months of this year.

The fear now among some top Democrats, in the words of one top party official, is that the Gibbs comments will “give the Republicans a big fundraising boost” as perception builds that Democrats are in even deeper trouble than already expected.

Gibbs himself has insisted all week that he was really just stating the obvious about the challenge Democrats are facing.

“I think I did what is maybe uncommon in this town and yesterday I opened my mouth and stated the obvious,” Gibbs said at Monday’s daily press briefing with reporters. “I do not believe that you all are now scurrying around to cover this election markedly different based on my having said that there are a number of seats that are in play.”

Gibbs has also stressed all week that he’s merely trying to focus everyone on the fact that both parties will be offering sharply different visions of how to deal with key issues like the economy.

“You’re going to have a choice between the leadership that we have now and the leadership that believes that BP should be apologized to first and foremost, and that the type of calamity wrought by the financial meltdown in the end of 2008 is analogous to the size of an ant,” Gibbs said Monday. “Those are choices that the American people are going to get a chance to hear and make in November.”

CNN’s Deirdre Walsh and Brianna Keilar contributed to this report.

Some Dems still fuming over Gibbs’ comments

By

Gloria Goodale,

Washington (CNN) — A top Democrat kept up the Joe Barton drumbeat Sunday, saying the Republican legislator’s defense of BP last week was an example of GOP ideology that favors big business.

Republicans seeking to change the subject countered that the nation’s focus should be on efforts to stop the Gulf oil gusher and criticized the Obama administration for failing to make that happen.

The statement last Thursday by Republican Rep. Joe Barton of Texas — which was quickly retracted under pressure from House GOP leadership — provided Democrats an opportunity to deflect growing public disenchantment with how the government was responding to the oil disaster.

Acknowledging the political gift handed to his party by Barton, White House Chief of Staff Rahm Emanuel told the ABC program “This Week” that Barton’s comment and other pro-BP statements by Republicans including Kentucky Senate candidate Rand Paul would be a factor in the November congressional elections.

“In case you forgot what Republican governance is like, Joe Barton reminded you,” Emanuel said, calling Barton’s comments a “philosophy” that considered BP the “aggrieved party” instead of the oil giant responsible for the worst environmental disaster in U.S. history.

“These aren’t political gaffes — Joe Barton was speaking from prepared remarks,” Emanuel said, calling the comment reflective of a GOP approach that considers the government to be the problem, not BP.

Video: Sen. Murkowski responds to DNC ad

Video: BP’s $20 Billion Fund

However, a statement later Sunday from the House Energy and Commerce Committee Republicans said Barton spoke off the cuff. The statement included what it said were his prepared remarks, which made no mention of an apology to BP or criticism of the fund the company created to pay for damages from the oil spill.

Republican Sen. Lisa Murkowski of oil-rich Alaska also challenged Emanuel’s comments, telling the CNN program “State of the Union” that the White House chief of staff was trying to deflect attention away from the magnitude and severity of the oil disaster.

“Let’s not be distracted by saying, you know, Joe Barton made this gaffe or this — this inappropriate comment,” Murkowski said. “Let’s focus on what we need to do, which is getting relief to the Gulf, making sure that they have every asset possible, making sure that we’ve got a claims compensation system that works for them. Let’s focus on providing what the people of the Gulf need, not pointing fingers back and forth and saying, ‘oh, you know, what you said was wrong.’ “

At a House committee hearing intended to grill BP CEO Tony Hayward, Barton instead drew the headlines for an opening statement that apologized to BP over the $20 billion account to pay damage claims that the company created at the request of President Barack Obama.

“I am ashamed of what happened at the White House yesterday,” said Barton, the ranking Republican on the panel. “I think it is a tragedy of the first proportion that a private corporation would be subjected to what I would characterize as a shakedown — in this case a $20 billion dollar shakedown.”

Democrats including Vice President Joe Biden and White House Press Secretary Robert Gibbs immediately criticized Barton, and Republicans quickly distanced themselves from their colleague. By mid-afternoon, Barton issued a statement retracting his apology to BP and instead apologizing for calling the fund a shakedown.

Now the Democratic National Committee is promising a television ad focusing on Barton’s comment, and Emanuel made sure to keep the issue alive on Sunday.

Murkowski and her Republican colleague Sen. Richard Shelby of Alabama, both criticized Barton’s comment, with Shelby calling it a “dumb mistake” and declaring on the CBS program “Face the Nation” that his party believed the oil disaster was a “man-made incident, a big mistake” by BP.

“They tried to do it on the cheap, I believe, made some shortcuts and they paid for it, and now we paid for it,” he said of the massive oil leak. Shelby also invited two of the Republicans cited by Emanuel — Barton and Paul — to visit the Gulf Coast region and witness themselves what is happening.

However, Shelby also added that Barton “only spoke for himself — that is not mainstream Republican thought.”

On the same program, though, Democratic Sen. Bill Nelson of Florida said Barton’s comment was “illustrative that the oil industry rules the roost.” He noted that senators from major oil-producing states were trying to prevent the chamber from voting on a bill that would greatly increase the liability of oil companies for damages from spills.

Dems continue to hammer GOP over Barton’s BP apology