Former President Clinton knocks Obama’s economic proposals

Former President Clinton chided President Obama for his economic proposals, saying that new taxes and spending cuts should be delayed until the economy gets out of the doldrums.

Clinton, who naturally supported his wife, Hillary Rodham Clinton, now Obama’s secretary of State, in the Democratic presidential primaries in 2008, has had a bit of a rocky relationship with Obama, though he backs the president on many issues. In an interview this week with Newsmax.com, Clinton called for a bipartisan approach to dealing with the nation’s economic woes and urged the parties to start with a resolution of the home mortgage crisis.

“I don’t think you can tax or cut taxes, I don’t think you can spend or not spend enough to get America back to a full employment economy until we flush that debt,” Clinton told the website.

The Obama administration has proposed a $447-billion jobs plan, to be funded in part by a reorganization of tax deductions and tax hikes for the rich. The plan would include a cut in the payroll tax, designed to put an estimated $1,500 into the pockets of a typical family to increase their spending power, coupled with some new spending to rebuild aging infrastructure and schools. Obama has also proposed a broader, $3-trillion deficit plan, which includes more than $1 trillion in spending cuts coupled with tax increases.

Both proposals have been condemned by Republicans, who argue that they oppose any tax hikes or new spending. On general, they said they backed spending cuts, but the specifics have yet to be worked out.

In his interview, Clinton called for putting the priority on reinvigorating the economy.

“I personally don’t believe we ought to be raising taxes or cutting spending until we get this economy off the ground,” Clinton said in the interview. “If we cut government spending, which I normally would be very inclined to do when the deficit’s this big, with interest rates already near zero you can’t get the benefits out of it.”

Clinton stressed that a bipartisan approach was needed, which, given the current political climate in Washington, may be easier said than done.

“So what I’d like to see them do is come up with a bipartisan approach, starting with the payroll tax cuts because they have the biggest return,” Clinton said.

“What I would like to say to the president and [House] Speaker [John] Boehner is, OK, you both have your deal. Go work it out. Meanwhile focus on putting Americans back to work,” he said.

“The first thing I’d say is we need to get a joint plan,” Clinton said. “I would organize a meeting. There are two big chunks of money in this country, untouched corporate treasuries and banks. Companies have $2 trillion but they’re not investing it. Banks have $2 trillion but they’re not investing it. I’d like to see him have joint meetings with these people and say: Tell us what it takes to get the money flowing again. We don’t have to borrow that from China. We don’t have to run the deficit up. The money’s there.”

michael.muskal@latimes.com