Today, President Obama said that gas prices are the “most prominent” impediment to the economic recovery. The President then went on to credit the tax deal (you know, the one he now is pushing to undo), specifically the payroll tax, as a way forward to counter the current and future headwinds. However last week, economists from Morgan Stanley issued a report stating that rising gas prices have nearly “fully offset the impact of the payroll tax reduction” the President claimed.
It begs the question: Where is the President’s plan to provide relief at the pump?
- President Obama: Obviously we are experiencing some headwinds. Gas prices probably being most prominent. It has enormous impact on family budgets and the psychology of consumers. (President Obama, 6/7/11)
- President Obama: Some of the steps we took during the lame duck session – the payroll tax, the extension of unemployment insurance, the tax breaks for business investment in plants and equipment – all those things have helped and one of things I am going to be interested in exploring with the members of both parties in Congress is: How do we continue some of these policies to make sure we get the this recovery up and running in a robust way? (President Obama, 6/7/11)
Economists: High Gas Prices Have Erased Benefits From Tax Deal. Want an easy explanation for why the economy and hiring have slowed again? Try this: High gas prices have erased the stimulative effects of the tax-cut deal President Obama and Republicans cut at the end of 2010. ... Morgan Stanley economists wrote Friday that their latest revision, from 3.6 percent growth down to 3.3 percent growth for the year, “puts us back to where we were in early December—before policymakers enacted a package of tax cuts aimed at stimulating the economy. “The logic behind this round trip in the forecast is fairly straightforward,” they wrote, adding: “The move in gasoline [prices] just about fully offsets the impact of the payroll tax reduction” that was the largest stimulative piece of the tax-cut deal. (National Journal, 6/4/11)
Reminder: House Republicans have put forward a pro-growth economic strategy that promotes lower energy prices by maximizing our domestic production while encouraging all forms of energy production.