Reid blames Wall Street, Bush for bad times

Vulnerable because of Nevada's dismal economy, U.S. Sen. Harry Reid fought back Tuesday against the charge from GOP challenger Sharron Angle that he is responsible for the state's record downfall.

In a new TV ad, Reid blamed the Bush administration, the cost of foreign oil and Wall Street for the recession and dismissed Angle as having "extreme ideas that would make things worse."

In a twist, however, both the Democratic incumbent and Angle are backing up to $300 billion in extended tax credits and new ones that President Barack Obama plans to propose today for businesses that spend money on research and development or on new equipment and plants.

Angle, however, wants Reid to go further and separately extend Bush administration tax cuts for everyone, highlighting a key difference between the two candidates and the two parties ahead of Election Day. Reid and Obama want to extend the tax cuts only for households with incomes below $250,000 for couples and $200,000 for individuals, but not the wealthiest 2 percent in the nation.

Like other Republicans, Angle also opposes a new $50 billion proposal from Obama to spend on roads, rails and runways, a measure she dismissed as more runaway federal spending.

"Harry Reid and President Obama are either entirely tone deaf to the voices of the American people or they simply don't care about what voters are saying," Angle said Tuesday in a statement opposing the $50 billion proposal. "Across this country, and especially in Nevada, voters are crying out that they are sick of the out-of-control government spending, and they want it to stop."

In Las Vegas, Reid was asked Tuesday whether what could amount to a $350 billion stimulus plan was too ambitious. The total is less than half the $787 billion stimulus package the GOP opposed last year.

"A lot of things are hard to get done because of procedural barriers, but I have hope," Reid told reporters on the sidelines of a clean energy summit, a week before Congress reconvenes. "And remember, I have committed to a lame duck (session). We have a lot of mopping up to do."

The fact that Reid is having to defend himself on the economy shows Angle hit his softest target as she focuses her campaign on blaming him for Nevada's record high 14.3 percent unemployment rate as well as home foreclosure and bankruptcy rates that give the state the nation's worst economy.

"I think there's a realization that the economy is all voters care about right now," said Jennifer Duffy, senior editor of The Cook Political Report. "And Reid needs to put the blame someplace. Wall Street and Bush work for him. ... He's trying to make the argument that we've done the best we could cleaning up Bush's mess. And it supports his argument that nobody can do more than him."

Angle has tried to turn Reid's campaign slogan on its head, however, saying he hasn't done enough to revive Nevada with key economic indicators diving since he became leader of the Senate.

Reid spokesman Jon Summers said the senator is working every day to create jobs, including by holding major summits such as Tuesday's aimed at making Nevada "the world leader in clean energy."

"The differences between Senator Reid and Sharron Angle couldn't be more clear," Summers said in an e-mail. "She calls unemployed Nevadans 'spoiled' and says it's not her job to create jobs or bring industry to Nevada."

Today , Obama will propose new tax breaks of up to $200 billion to give businesses an incentive to buy new equipment in the short term, according to several reports. Businesses could write off 100 percent of new investments in plants and equipment made between now and the end of 2011.

He also will propose a $100 billion permanent extension of the business tax credit for research and development, as well as $50 billion in new infrastructure spending included in a package that the president will officially unveil during his economic speech in Cleveland. Obama reportedly would offset the cost by closing tax breaks for multinational corporations, oil and gas companies and others.

Angle campaign spokesman Jarrod Agen said the former Reno assemblywoman "has always been in favor of tax cuts and tax credits" so she would approve the Obama tax breaks on their own.

"She supports a $200 billion tax cut giving businesses incentive to buy new equipment and is supportive of a $100 billion 'tax cut' to permanently extend business tax credit for research & development," Agen said in an e-mail, adding a caveat, however. "She argues that it would be simpler to make permanent all of the 2001 and 2003 tax cuts."

If Obama and Reid "are insistent on letting portions of those (Bush) tax cuts expire, or to legislate a further $50 billion in new infrastructure spending, she would fight to remove those provisions as increased spending has done nothing for the national economy and has only increased our national debt," Agen added.

Asked whether Angle would support a $30 billion small-business jobs bill that Reid plans to bring up first thing next week, Agen said, Angle is only in favor of tax cuts "to jump start our economy."

"These tax cuts cannot be tied to spending increases from President Obama," Agen said.

Many Republicans have derided the $30 billion lending fund to help community banks as another bailout, although it is intended to quickly boost small businesses and spur hiring.

Reid spokesman Summers said the $30 billion bill would cut taxes and help businesses create jobs.

"We hope Republicans will support this bill and the out-of-work Nevadans it would benefit," he said.

Summers also said that any extension of the Bush tax cuts and the proposed business tax credits would be separate pieces of legislation and so Angle is "suggesting a false choice."

The New York Times reported Monday that Obama will rule out any compromise that would extend the Bush-era tax cuts for the wealthy beyond this year.

The report came as the White House tried to tamp down speculation that the president might extend the tax cuts for the rich because of election year pressure and suggestions by major economists that letting the tax breaks lapse would be a blow to the delicate economy in the short term.

Speculation increased after Obama's recently departed budget director, Peter R. Orszag, suggested a two-year extension of the Bush tax cuts in a column published in Monday's Times.

Contact Laura Myers at lmyers@reviewjournal.com or 702-387-2919.