The Commerce Department said Friday that the economy rebounded from an anemic 0.4 percent annual growth rate in the October-December quarter. Consumer spending surged at an annual rate of 3.2 percent — its biggest jump since the end of 2010.

Growth was also helped by businesses, which responded to the greater demand by rebuilding their stockpiles. And home construction rose further.

Government spending sank at a 4.1 percent annual rate, led by another deep cut in defense spending. The decline kept last quarter's increase in economic growth below expectations of a 3 percent rate or more.

Many economists say they think growth as measured by the gross domestic product is slowing in the April-June quarter to an annual rate of just 2 percent. Most foresee growth remaining around that subpar level for the rest of the year.

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Now, on the eve of the opening of his presidential library and an apparent Bush-rehabilitation tour, starting with a Diane Sawyer interview Wednesday night, Bush faces a kinder, gentler American public. According to a new ABC News/Washington Post poll, Americans are now split on the former president, with 47 percent approving of his performance and 50 percent disapproving. He’s still underwater, as the pollsters say, but that’s not a bad jump in four years. He’s even climbed on the economy, with 43 percent now approving of the job he did, while 57 percent stayed tethered to the reality-based community, and still disapprove.

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"By speaking to anchors from stations around the country, the president will have an opportunity to focus on the harmful local impacts that will be felt if congressional Republicans refuse to compromise," a White House official said in a statement.

Among the local news networks are ABC7 in San Francisco, KITV 4 in Honolulu, and KFOR in Oklahoma City.

As the Washington Post reports, "with no recent communication between the White House and congressional Republicans, much of Washington seems resigned to the cuts taking effect March 1."

In the meantime, both sides are preparing to defer the blame for the cuts, should they go into effect.

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But at least one of those job creators says that's bunk. Bill Harris, the former CEO of PayPal and Intuit (the giant software company whose main clients are small business), and the current CEO of Personal Capital, recently wrote a column in Forbes headlined "Tax Cuts Don't Create Jobs." We spoke with him to find out more and he told us marginal tax rates simply aren't the driving concern for companies when they're thinking about creating jobs.

Why do you say tax cuts don’t create jobs?

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Boehner's plan is one previously outlined by Erskine Bowles, who co-chaired last year's failed deficit commission, which included spending cuts and $800 billion in new revenue through reforming the tax code.

"The new revenue in the Bowles plan would not be achieved through higher tax rates, which we continue to oppose and will not agree to in order to protect small businesses and our ailing economy," Boehner wrote. "Instead, new revenue would be generated through pro-growth tax reform that closes special-interest loopholes and deductions while lowering rates. On the spending side, the Bowles recommendation would cut more than $900 billion in mandatory spending and another $300 billion in discretionary spending. These cuts would be over and above the spending reductions enacted in the Budget Control Act."

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House Speaker John Boehner, R-Ohio, met with Treasury Secretary Timothy F. Geithner and White House legislative affairs chief Rob Nabors on Thursday, following a Wednesday night call with the president. But Boehner said after the meetings that “no substantive progress” had been made and “the White House has to get serious” about cuts to entitlements.

"I was hopeful we'd see a specific plan for cutting spending, and we sought to find out today what the president really is willing to do," he told reporters, according to the AP.

Senate Minority Leader Mitch McConnell agreed. "To date, the administration has remained focused on raising taxes and attending campaign-style events, with no specific plans to protect Medicare and Social Security or reduce our national debt in a meaningful way," he said in a statement. "And today, they took a step backward, moving away from consensus and significantly closer to the cliff."

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So will doctors who accept Medicare, people who get unemployment aid, defense contractors, air traffic controllers, national park rangers and companies that do research and development.

The package of tax increases and spending cuts known as the "fiscal cliff" takes effect in January unless Congress passes a budget deal by then. The economy would be hit so hard that it would likely sink into recession in the first half of 2013, economists say.

And no matter who you are, it will be all but impossible to avoid the pain.

Middle income families would have to pay an average of about $2,000 more next year, the nonpartisan Tax Policy Center has calculated.

Up to 3.4 million jobs would be lost, the Congressional Budget Office estimates. The unemployment rate would reach 9.1 percent from the current 7.9 percent. Stocks could plunge. The nonpartisan CBO estimates the total cost of the cliff in 2013 at $671 billion.

Collectively, the tax increases would be the steepest to hit Americans in 60 years when measured as a percentage of the economy.

"There would be a huge shock effect to the U.S. economy," says Mark Vitner, an economist at Wells Fargo.

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“The leadership in the Republican Party and the leadership in the conservative movement has to pull back, let people float new ideas," Kristol said. "Let’s have a serious debate. Don’t scream and yell when one person says, ‘You know what? It won’t kill the country if we raise taxes a little bit on millionaires.’ It really won’t, I don’t think.”

“I don’t really understand why Republicans don’t take Obama’s offer to freeze taxes for everyone below $250,000 — make it $500,000, make it a million,” Kristol argued. “Really? The Republican Party is going to fall on its sword to defend a bunch of millionaires, half of whom voted Democratic and half of them live in Hollywood?”

Watch, via Raw Story:

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The New York Times reported Thursday that the CRS pulled the report in September, "against the advice of the agency’s economic team leadership," after Republican protests.

"The results of the analysis suggest that changes over the past 65 years in the top marginal tax rate and the top capital gains tax rate do not appear correlated with economic growth," the report concluded.  "The reduction in the top tax rates appears to be uncorrelated with saving, investment, and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie."

From the Times:

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One of the Op-Ed's co-authors is Kevin Hassett, a man who has been much mocked for making the worst economic prediction since Irving Fisher declared stocks to be at a "permanently high plateau" ... in 1929. A Hassett-bylined column on the WSJ opinion page is not where most economists tend to look for solid, peer-reviewed analysis, so we'll leave the painstakingly researched disembowelment of his argument to others. But the mere appearance of such an argument with less than two weeks to go before Election Day is still worth appraising. Kevin Hassett is an adviser to Mitt Romney -- he's someone who will have real influence on economic policy if Romney wins. So the real question here is not how wrong his argument might be, but why he is making the argument at all. Why does Kevin Hassett want us to believe that income inequality is not getting worse?

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Funny thing about small businesses. Not only are they responsible for creating lots and lots of jobs, but they're also responsible for the loss of lots and lots of jobs.

That insight comes courtesy of Inc. Magazine's Bo Burlingham, in the intriguing article "Who Really Creates the Jobs?" Burlingham's investigation should be required reading for every pundit who wants to wax eloquent about the government role in spurring small business job creation, because it makes a convincing case that both Republicans and Democrats are going about things all wrong -- at least at the federal level.

"If you were to group together the vast majority of small companies," writes Burlingham, "their net job generation would add up to zero."

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"The payroll tax holiday was intended to be temporary and there is strong bipartisan support to let that tax provision expire," said Sen. Orrin Hatch of Utah, the top Republican on the Senate Finance Committee. "The continued extension of a temporary payroll tax holiday has serious long-term implications for Social Security and, frankly, it's not even clear that it has helped to boost our ailing economy."

When it comes to tax cuts, Congress' attention will focus on the January expiration of the Bush-era cuts, which are expected to take center stage in the coming lame-duck session.

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In an interview with Romney campaign advisor Ed Gillespie, Wallace said that the studies "are hardly non-partisan."

Gillespie had just echoed Romney regarding the supposed "six studies" on his plan for an across-the-board tax cut. Romney has repeatedly used those studies to dispute the non-partisan Tax Policy Center's conclusion that his tax cut would cost $5 trillion over 10 years, or require a tax increase for middle-income Americans.

Several of those studies are not really studies, but blog posts or Op-Eds; one is by Romney's campaign advisers, most are not non-partisan, including one from the conservative think tank the American Enterprise Institute.

In one exchange, Wallace asked Gillespie about that study:

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For the most part, analyzing such hideous dishonesty is where political reporting has started and stopped. How big a liar is Romney? Was he lying in the first statement or the second one? These are, no doubt, important questions -- and to answer but one of them, it's obvious Romney was lying in the most recent one. As the nonpartisan Tax Policy Center reported, the Republican nominee's proposal, if enacted, would "result in a net tax cut for high-income tax payers and a net tax increase for lower- and/or middle-income taxpayers."

However, critical as such short-term fact checking is, it misses the much bigger news embedded in all the subterfuge. In short, it misses the genuinely mind-boggling fact that a Republican nominee for president is now campaigning on a promise to not cut taxes on the wealthy.

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"Jack Kennedy lowered tax rates and increased growth," Ryan fired back.

Biden scoffed:  "Oh, now you're Jack Kennedy?"

Video via TPM.

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Watch:

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"I think you've got to look carefully at how Romney structured -- what he said is, something that, frankly, true supply-siders don’t necessarily love, but it’s good politics — he said, ‘I will close enough deductions that wealthy Americans will not get a net tax cut,’” Gingrich said.

Gibbs pointed out that in the Republican primary debate in Arizona, Romney said: “We’re going to cut taxes on everyone across the country by 20 percent, including the top 1 percent.”

"Was he dishonest when he said that?" Gibbs asked Gingrich.

“I think it’s clear he changed,” Gingrich replied.

Watch, via TPM, ThinkProgress:

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