Congress Returns to a Full Plate of Economic Issues

Democrats and Republicans spar over jobs and other pocketbook issues.

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From sea to shining sea, members of Congress spent their Fourth of July recess on the campaign trail, armed with economic talking points. Given last month's 9.5 percent national unemployment rate, jobs remain the foremost issue (including for incumbents who risk losing theirs), although other economic factors such as the policing of Wall Street and the size of the national deficit get top billing as well.

Back home, the lawmakers discussed the major legislation facing predictably partisan wrangling as they return to Washington this week, notably a Democratic-backed jobs bill and the financial regulation reform package, which is due for a Senate vote after House passage June 30. As for what Congress has already done, such as healthcare reform, that provided political fuel to rally the base and to try to win over undecided independents. [See a slide show of 11 hot races this fall.]

With polls showing a tide of anti-incumbent sentiment, the GOP has launched an offensive blaming the Democratic majority for the persistent high unemployment. "The Democrats have already lost all their credibility on the jobs issue," says Brian Walsh, spokesman of the National Republican Senatorial Committee. Republican candidates are banking on that. In Nevada, for instance, Republican challenger Sharron Angle is trying to use the state's 14 percent unemployment rate against Senate Majority Leader Harry Reid, who tops the GOP hit list. On a local news show, Angle said of the state's high joblessness, "I lay that all at Harry Reid's footstep." [See who is donating to Reid's campaign.]

Democrats point back to the Republicans for blocking measures to create jobs and to extend emergency long-term unemployment benefits. To drive home that point, Democratic incumbents, like newly vulnerable California Sen. Barbara Boxer, went on state job tours during the recess, speaking with small business owners and supporters about local job creation. [See which industries give the most to Boxer.]

Some candidates, Democrats especially, also used this campaign time to position themselves against Wall Street, whose greed and risky excesses they cite as contributing to the nation's economic distress. House Democrats were able to boast about the passage of the Wall Street reform bill. Following House Speaker Nancy Pelosi's lead, many called attention to House Minority Leader John Boehner's controversial comment saying the financial regulation legislation is like "killing an ant with a nuclear weapon." In the same way, Democrats played up Texas Rep. Joe Barton's apology to oil giant BP. "House Democrats will continue to draw a sharp contrast with Republicans' extreme special interest-backed agenda of outsourcing jobs overseas, privatizing Social Security and Medicare, and their shameless defense of Wall Street and Big Oil," says Democratic Congressional Campaign Committee spokesman Ryan Rudominer.

While both sides are recognizing the public's growing concern about the federal deficit, Republicans reiterate their traditional concerns about big government and paint Democrats as irresponsible big spenders. Democrats point to the deficit spending of the last Bush administration and, in some cases, even to their opponents' personal financial histories. In Northeast Ohio's 16th district, for instance, Democratic campaigners publicized records allegedly showing that Rep. John Boccieri's GOP challenger, businessman Jim Renacci, once owed nearly $1.4 million in unpaid state taxes. Renacci's campaign claims that it was a misunderstanding and that he has since paid his taxes in full.

Moving into this week, the Senate will resume its work revamping financial regulation, and Democrats will look towards Maine Republican Sen. Olympia Snowe and Massachusetts Republican Sen. Scott Brown for the two extra votes needed to surpass the 60-vote filibuster barrier. Both senators had negotiated concessions on the bill during talks with the House before the recess. Democrats also hope for the support of Iowa Republican Sen. Chuck Grassley.