Bloomberg News

Senate Democrats Eye Elections in Split With Obama Over Jobs

October 05, 2011

(Adds Obama comments starting in 13th paragraph. For news on the 2012 election, see ELECT.)

Oct. 5 (Bloomberg) -- President Barack Obama campaigns across the country for the centerpiece of his economic agenda with a simple refrain: “Tell Congress to pass this bill.”

He knows Republicans are against him. Increasingly, members of his own party are, too, posing a challenge to his economic agenda and clouding his re-election strategy.

The disunity is on display this week in Washington, where Senate Democratic leaders delayed action on Obama’s $447 billion jobs bill to advance a measure he doesn’t support that would retaliate against China for undervaluing its currency.

Obama’s jobs proposal so far lacks enough support to even begin debate in the Senate. Democrats there are considering a surtax on millionaires to replace tax increases in his bill, a Democratic aide said yesterday on condition of anonymity. Leaders are trying to win over Democrats like Ben Nelson of Nebraska and Joe Manchin of West Virginia, who are up for election next year and don’t yet favor the president’s plan.

Asked whether Obama’s agenda appeals to senators who face voters in 2012, Manchin said in an interview, “His approval rating is 28 percent in West Virginia. You do the math.”

Some Democrats are rebuffing pending trade agreements with South Korea, Colombia and Panama, while others bristle at some of the $1.5 trillion in tax increases in Obama’s plan to trim budget deficits by $3 trillion over a decade. With Republicans in control of the House, White House discord with the Senate’s Democrats risks slowing Obama’s economic agenda to a crawl.

Senator Richard Durbin of Illinois, the second-ranking Democratic leader, said he sees “no indication” that election considerations are taking over. Differences with the president over legislation are normal, he said.

‘Creatures of Elections’

“We’re all creatures of elections -- the president as well as members of Congress,” Durbin said. “But there are always differences. When the president puts out a proposal, there are going to be a few members of his party who are going to want to do it a little differently. We’re working to accommodate that.”

Democrats hold a 53-47 Senate majority and risk losing control to Republicans next year. Of the 33 Senate seats up for re-election, 23 are held by Democrats, and all but two of the almost dozen seats rated by the nonpartisan Cook Political Report as vulnerable to a party switch are held by Democrats.

Some Democrats facing re-election come from states with unemployment rates at least as high as the nation’s 9.1 percent, including Debbie Stabenow of Michigan, Sherrod Brown of Ohio and Bill Nelson of Florida. Other senators such as Bob Casey of Pennsylvania and Manchin are showing independence from a president whose approval ratings dipped below 40 percent in national opinion surveys.

‘Desperate Man’

Senate Republicans, largely united against Obama’s domestic agenda, see nothing but political opportunity in the split. Senator John Cornyn of Texas, chairman of the National Republican Senatorial Committee, said Obama is a “desperate man.”

“He’s obviously in a defensive crouch, given the mood of the country and this feeling that he hasn’t done enough to help facilitate job growth,” Cornyn said. “Democrats don’t want to be associated with him because he’s unpopular, and I think it’s making a lot of them very uncomfortable.”

While he faces dissent in his party, Obama is sharpening his rhetoric against the Republican leaders he says stand in the way of his job-creation plan. At a Texas rally yesterday, he criticized House Majority Leader Eric Cantor, a Virginia Republican, prodding him to schedule a vote on the jobs bill.

‘What’s the Problem?’

“I mean, what’s the problem?” Obama said at a community college in the Dallas suburb of Mesquite. “Do they not have the time? They just had a week off. Is it inconvenient?”

Some tension between Obama and Senate Democrats was evident in July and August during negotiations for a plan to cut the deficit while raising the U.S. borrowing limit.

Democrats were angered that Obama discussed a deficit- reduction deal of about $3 trillion with Republican House Speaker John Boehner that would have cut domestic priorities while delaying tax increases. Talks fell apart, and lawmakers enacted a smaller deficit-cutting plan.

‘Serious Concerns’

Obama’s jobs plan, offered on Sept. 8, was immediately dismissed by Manchin, who said he had “serious concerns” about the amount of spending and likely effectiveness. Nelson of Nebraska questioned the wisdom of tax increases proposed to pay for it, which include capping itemized deductions and some tax exclusions for the wealthy and rolling back tax breaks for private-equity fund managers and oil companies.

Nelson said this week “we have to see” what the proposal looks like after senators have a chance to amend it on the floor. Senate Majority Leader Harry Reid said he will advance the measure later this month.

The free-trade deals, with wide support from Republicans in the House and Senate, are running into Democratic resistance.

“With an exploding trade deficit that has caused massive job loss, now is not the time to pass more wrongheaded free- trade agreements,” Brown said in a statement released after the White House sent the measures to Congress on Oct. 3.

Reid of Nevada has said he won’t support them, though he won’t try to block floor consideration.

Trade Agreements

“I want everyone within the sound of my voice to understand that I do not like the Colombia Free Trade Agreement, the Korea Free Trade Agreement or the Panama Free Trade Agreement,” Reid said on the Senate floor last month. “I will vote against them.”

The China currency measure lets vulnerable Democrats from manufacturing states including Ohio, Michigan and Pennsylvania criticize that country, while ignoring the administration’s reluctance to directly take on a major trade partner.

Democratic leaders moved it to the Senate floor before Obama’s jobs measure. The currency bill is co-sponsored by Stabenow, Brown and Casey.

“The U.S. has allowed China to manipulate its currency without consequence and the practice has taken a dramatic toll on Pennsylvania’s companies and workers,” Casey said Oct. 3. “We have had enough tough talk - now we need tough action.”

Senator Charles Schumer of New York, the No. 3 Democratic leader, predicted the Senate will pass the legislation on a “strong and overwhelming vote,” even as Boehner of Ohio yesterday said it was a “dangerous” and ineffective way to deal with concerns about China’s currency.

The White House has used guarded language in discussing the debate. White House spokesman Jay Carney said the administration shares the goal of increasing the value of China’s currency, but added the bill must be “effective and consistent with our international obligations.”

--With assistance from Kathleen Hunter, Roger Runningen and Kate Andersen Brower in Washington. Editors: Laurie Asseo, Jodi Schneider

To contact the reporter on this story: Laura Litvan in Washington at llitvan@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net


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