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Little 'appetite' for new stimulus, Obama adviser says

By the CNN Wire Staff
  • "Not a great desire" for more stimulus, Axelrod says
  • Obama adviser calls for extended jobless aid
  • Republicans argue for more spending, tax cuts
  • Axelrod: GOP ideas "got us into this disaster"

Washington (CNN) -- The Obama administration wants to boost the staggering U.S. economy by boosting exports and offering small-business tax credits, but the prospects for additional stimulus spending are weak, the president's top political adviser conceded Sunday.

"Everybody agrees we have to do more," David Axelrod told CNN's "State of the Union." He said the administration has boosted the economy with its first stimulus package, which it pushed through Congress shortly after taking office in 2009, and Obama has pledged to double U.S. exports in five years, but, "We have to accelerate that."

But with members of Congress expressing increasing concern about the budget deficit, which already tops $1 trillion for a budget year that ends in September, Axelrod admitted there's "not a great desire" for additional government spending.

"Even though there's some argument for additional spending in the short run to continue to generate economic activity, there's not a great appetite for it," he told ABC's "This Week."

Axelrod said the administration still can push for tax relief and expanded lending for small businesses, which he called "an engine of economic growth," and said Congress "ought to extend undemployment insurance" for the long-term jobless.

"We're hoping we can persuade enough people on the other side of the aisle to put politics aside and join us on that," he said.

The Republican minority in the Senate has so far blocked an extension of weekly jobless checks to an estimated 2.1 million people, demanding that the money should be offset by other cuts. And they are arguing that the Bush administration's entire slate of tax cuts be kept in place beyond the end of the year, when they are set to expire.

"How are going to you invest if you're an investor when you think your capital gains taxes are going to go up and your dividends are going to go up? And if you're a small business owner, you're going to get hit with a tax increase, too. No wonder the economy is stagnant," former Bush administration adviser Ed Gillespie told NBC's "Meet the Press."

But critics like Paul Krugman, a Nobel Prize-winning economist and New York Times columnist, argue that a seemingly faltering economic recovery needs more short-term government spending to stay afloat -- particularly since states are facing significant cutbacks and layoffs.

And President Barack Obama has jumped into the fray with both feet as the November election nears, mocking Republican leaders who saw budget deficits return and grow rapidly while they controlled Congress and the White House.

"It's a little odd getting lectures on sobriety from folks who spent like drunken sailors for the last decade," Obama said Thursday during an appearance in Kansas City, Missouri.

Axelrod told CNN that voters in going to the polls in November will have a choice "between two economic theories: the one that got us into this disaster in the first place, and the one that is getting us out."

"There is no doubt that the Republican strategy has basically been to say 'no' to everything and to try and turn the clock back in order to win an election and restore the policies that got us into this mess in the first place," he said. "And that's something we can't abide and that's something we can't accept."