September 5, 2010 / 2:13 AM / 9 years ago

Obama says his economic policies halted "bleeding"

WASHINGTON (Reuters) - President Barack Obama, previewing a big push on the U.S. economy next week, on Saturday defended policies that he said “have stopped the bleeding” and put the middle class on the road to recovery.

President Barack Obama (L) delivers remarks on the latest employment statistics released on Friday, alongside Treasury Secretary Tim Geithner in the Rose Garden of the White House, September 3, 2010. REUTERS/Jason Reed

Obama, struggling to bring down the 9.6 percent jobless rate, is to spend next week talking up proposals on improving the economy.

He hopes to gain some traction with impatient voters as they ponder whether to toss out his Democrats in the November 2 congressional elections.

In his weekly radio and Web address, Obama pointed to measures funded by the Democrats’ $814 billion economic stimulus as responsible for halting the economic slide he faced when taking office in January 2009.

This includes spending on roads and bridges and money given to local governments to avert layoffs of teachers, firefighters and police officers.

“The steps we have taken to date have stopped the bleeding,” Obama said. “But strengthening our economy means more than that.”

Other steps, he said, were aimed at helping the middle class, citing a portion of his U.S. healthcare overhaul that stopped insurance companies from refusing to cover people with pre-existing health conditions.

Obama is trying to convince Americans that Democratic policies offer the best economic future for them as he seeks to turn back a strong challenge from Republicans for control of the U.S. House of Representatives and possibly the Senate.

Obama is to visit a labor rally in Milwaukee on Monday, the Labor Day holiday, and then is to lay out targeted proposals to boost job growth when he visits Cleveland on Wednesday. A presidential news conference is planned on Friday at the White House.

A number of options are likely, such as extending middle class tax cuts, investing in clean energy, spending more on infrastructure, and delivering more tax cuts to businesses to encourage hiring.

RESEARCH TAX CREDIT

The New York Times reported late Saturday that Obama will ask Congress to increase and permanently extend a tax credit for business research expenses and pay for the program, which would cost up to $100 billion over 10 years, by closing other corporate tax breaks.

Citing unnamed administration officials, the newspaper said Obama will outline the proposal in a speech in Cleveland. The White House chose the venue in part to draw a contrast with a recent economic address there by Ohio Representative John Boehner, the House Republican leader.

The research credit, which has existed in some form since 1981, would be expanded under the Obama plan, the Times said. The simpler of two credit options available to business would be increased to 17 percent from 14 percent, it said.

The Wall Street Journal reported on Saturday that the Obama administration was moving toward using revenue that would be generated after the expiration of existing tax cuts for upper-income people to finance about $35 billion of tax cuts targeted at small businesses and lower-income workers.

A White House spokeswoman, Amy Brundage, declined to comment on the Journal report.

The White House is careful to say these proposals do not add up to a second stimulus package, given voters’ anxiety about the country’s record budget deficit.

Democrats are to kick off their autumn effort to hang on to Congress on Wednesday when Democratic Party Chairman Tim Kaine delivers a speech in Philadelphia that the party said will frame the choice for voters.

Kaine will “explain the choice the American people have in front of them — a choice between Democrats, who are moving America forward and Republicans, who want to take us back to the failed policies of the past that brought our economy to the brink of collapse,” a party statement said.

Republicans said Democratic policies are responsible for the sagging economy.

“This administration claimed its economic policies would keep unemployment under 8 percent, cut the deficit and turn our economy around. Instead, the unemployment rate is nearing 10 percent, the debt is exploding and we’ve lost hundreds of thousands of jobs over the summer months,” said Senate Republican leader Mitch McConnell.

Additional reporting by Todd Eastham; editing by Mohammad Zargham and Eric Beech

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