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Wednesday, August 24, 2011

The Debt, the President, and the Independent Vote

Ian Swanson writes at The Hill:
The unpopular debt-ceiling deal has significantly hampered President Obama’s effort to win over independent voters.

Ross Baker, a professor at Rutgers University who studies the presidency, said Obama didn’t strengthen his position with any identifiable constituency during the debt-ceiling debate.

“He lost his hero status with liberals if he hadn't previously with the extension of Bush tax cuts,” said Baker, referring to a December deal that extended all of the tax rates approved by former President George W. Bush. That bipartisan agreement was also seen as an effort to win over Independents.

“His willingness not to press for revenues did not help him with persuadable GOP leaners and he is just anathema to conservatives and would have been irrespective of the outcome,” Baker said.


Jason Johnson, a political professor at Hiram College in Ohio, said the White House was correct in thinking that independents would value the deal. The problem, Johnson said, is that the public soured on the debt accord since it was quickly followed by the S&P's decision to downgrade the U.S. credit rating.

“He ends up having a deal which the left is unhappy with and you still get a downgrade, which is really the thing independents care about,” Johnson said

The latest data will probably not boost the president's prospects. The Congressional Budget Office reports:

The United States continues to face profound budgetary and economic challenges. CBO discusses those challenges in the Budget and Economic Outlook: An Update—an annual report, released today, which presents the agency’s updated budget and economic projections for the current year and the next decade.

Federal budget deficits and debt have surged in the past few years, and this year’s deficit—projected to be $1.3 trillion—stems in part from the long shadow cast on the U.S. economy by the financial crisis and the recent recession. Although economic output began to expand again two years ago, the pace of the recovery has been slow, and the economy remains in a severe slump. Recent turmoil in financial markets in the United States and overseas threatens to prolong the slump. CBO expects that the recovery will continue but that real (inflation-adjusted) GDP will stay well below the economy’s potential—a level that corresponds to a high rate of use of labor and capital—for several years.

CBO projects that real gross domestic product will rise 2.3 percent this year and 2.7 percent next year. It also reckons that the unemployment rate will drop to 8.9 percent in the fourth quarter of this year and to 8.5 percent in the fourth quarter of 2012 and then stay above 8 percent until 2014.