In Ohio, Obama makes it personal, attacks GOP leader John Boehner

Obama's speech Wednesday marked a post-Labor Day ramp-up of election sparring. It threw into sharp relief an issue that both parties see as central to their campaign strategies: taxes.

President Obama on Wednesday took the election-year battle over the economy and made it personal.

In a speech in the Cleveland area, he cast Ohio Republican John Boehner as a symbol of a party with "no new ideas." He accused the House Republican leader of holding middle-class tax cuts "hostage" in an effort to preserve Bush tax cuts for the richest Americans.

With pivotal elections in Congress less than two months away, Mr. Obama also got personal in defending his own record. He cited his own family story as exemplifying American values of "responsibility for ourselves, but also responsibility for one another."

Although he used the event to urge new tax cuts for businesses, Obama's speech was a broad effort to counter criticism and low approval ratings for his economic policies. He emphasized his support for private enterprise, in contrast to critics who have termed his policies "socialist." And, he argued, the economy's problems have their roots in the Bush administration, not his own.

The challenge of selling that message to voters remains a large one, though. The president acknowledged that Americans are angry and also anxious about the future. In many ways, his speech Wednesday was an effort to redirect the frustration and fear toward Republicans rather than toward himself and his own party.

In an ABC News/Washington Post poll conducted last week, only 41 percent of Americans said they approved of Obama's handling of the economy, the lowest percentage seen in surveys since his inauguration. The poll also found deterioration in the number agreeing with the statement "he shares your values" (49 percent).

Moreover, Republicans and Democrats are roughly tied in their level of public trust, whereas Democrats held a 2-to-1 advantage on that score at the end of 2008.

The president's economic proposals this week did not give a big upward push to the stock market. The new Obama initiatives include a plan for $50 billion in new infrastructure spending and tax breaks designed to spur businesses to buy new equipment or invest in research.

But his speech didn't rattle investors, either. Major stock indexes rose modestly as he spoke and then ended the day around where they had been when Obama took the podium just after 2 p.m.

The speech throws into sharp relief an issue that both parties see as central to their fall campaign strategies: taxes.

Many businesses and economists support the concept of Obama's proposed tax relief for employers, but politically that new proposal is a sideshow to the battle over whether to make the Bush-era tax cuts permanent in part or in whole.

Obama accused Representative Boehner and his party of favoring "the same philosophy that led to this mess in the first place: cut more taxes for millionaires and cut more rules for corporations."

Immediately after the speech, Boehner fired off his own written response: "If the president is serious about finally focusing on jobs, a good start would be taking the advice of his recently departed budget director and freezing all tax rates, coupled with cutting federal spending to where it was before all the bailouts [and stimulus programs].”

This sets up a potential game of chicken. As Republicans seek to tar Obama as a tax hiker, Democrats may dare Republicans to vote "no" later this month on Obama's proposal to extend the tax cuts just for households earning less than $250,000 a year.

The Republican plan, extending the top-bracket tax cuts, would cost the government $700 billion over the next decade, while not doing much for consumer spending, Obama said.

But that reasoning misses a larger issue, say critics of Obama. An important challenge for America now is to restore frayed confidence among consumers, businesses, and investors. Toward that end, even some Democrats have argued recently for extending all the tax cuts (at least for a time).

In part, the rationale would be to change the tone of the administration toward businesses and investors who have sometimes felt demonized by the president. Although Obama talked Wednesday about "an era of irresponsibility" that preceded the recession, he didn't recycle any references to "fat cats" or "greed."

"I believe it’s the drive and ingenuity of our entrepreneurs ... and dedication of our workers that’s made us the wealthiest nation on earth," Obama said. "I believe it’s the private sector that must be the main engine for our recovery."

Whether Obama and Democrats gain from the speech or not, it marks a post-Labor Day ramp-up of election sparring. As Obama sought to solidify an image of Republicans as obstructionists, they responded to the speech by casting Obama as a tax-and-regulate liberal.

Business groups, for their part, gave Obama some praise mixed with a warning.

“The simplification and permanence of the [research and experimentation tax] credit could be very helpful to small, innovative companies, and is something NSBA supports," Todd McCracken, president of the National Small Business Association, said in a statement Wednesday. He also welcomed an Obama proposal for businesses to get, temporarily, immediate (rather than multiyear) tax write-offs on investments.

But Mr. McCracken said that Obama's overall proposals, when the expiration of upper-income tax rates is factored in, "could actually be a negative for small businesses."

That's because many small businesses, perhaps representing half of all small-business income, report their income under the personal income tax.