A senior advisor to Barack Obama says the president-elect will pursue an ambitious, far-reaching economic agenda to pull the United States out of recession and lay the foundation for long term economic growth.
The US economy has deteriorated significantly since Barack Obama won the November 4th election, with higher unemployment, plunging consumer spending, and further readings of negative growth. With that deterioration comes a question: will the worsening conditions force the incoming president to jettison the economic strategy he laid out during the campaign and formulate a new one?
For now, the answer appears to be no.
Speaking on NBC's Meet the Press program, a senior Obama advisor, David Axelrod, said the president-elect remains committed to reforming America's tax code and spurring job creation through federal activism.
"Every economist from left to right agrees that we have to do something big in terms of job creation, but we want to do it in a way that will leave a lasting footprint. So we are talking about investing in alternative energy projects that will help us achieve energy independence. We are talking about rebuilding the nation's classrooms, and of course infrastructure: rebuilding our crumbling bridges and roads and waterways. These are things that will put people to work, but will also strengthen our economy in the long run," said Axelrod.
Axelrod said Mr. Obama will also fulfill a campaign promise to pursue a middle class tax cut as part of an overall plan to make America's tax code more progressive. The total cost of the Obama's stimulus program is expected to run in the hundreds of billions of dollars.
As president, Mr. Obama will have expanded Democratic majorities in both houses of Congress to help enact his agenda. But he will lack the supermajority required to prevent Republicans from using a parliamentary maneuver, known as a filibuster, to block legislation.
Many Republican legislators remain opposed to tax increases of any kind, particularly during a recession. They argue that Mr. Obama's plan to allow the expiration of temporary tax cuts enacted during the Bush administration amounts to a massive tax hike.
Speaking on ABC's This Week program, Republican Senator Bob Corker of Tennessee said, more than government stimulus, what the economy needs is an unfreezing of tight credit so that the private sector can become productive again.
"The biggest thing we can do, and what I am seeing here in my home state, is get the credit markets functioning so that local banks are lending money to small businesses that create the jobs that all of us care so much about," said Corker.
But Ohio Senator Sherrod Brown expressed the views of many Democrats: that the economy cannot recover without receiving a significant boost, and that the only entity capable of providing it right now is the federal government.
Brown also spoke on This Week, saying "When you see what has happened with consumer spending, in Christmas especially, Christmas sales, holiday sales, and you understand that 70 percent of the economy is all about consumer spending, we need a real stimulus to get people to spend money. And that means putting money in infrastructure, water and sewer."
The U.S. economy is believed to have been in a recession since December of last year. What began with a rash of home foreclosures accelerated into a full-blown credit and financial crisis that has spread around the world, prompting what many economists anticipate will be a deep global recession.