PEOSTA, IOWA — On the second day of his Midwestern economic tour, President Obama bussed through idyllic landscapes in rural Iowa, armed with several measures that he said would boost the economy here.
But, the administration soon added, none will require more federal funding that Congress must approve.
Such is the dilemma facing Obama as he sets the stage for a battle in Washington this fall over efforts to tame the debt and boost the economy.
Administration aides said the president is planning to advance new ideas to help the economy in September. But any measures that would make a significant near-term difference to economic growth would probably require new spending, and Republicans insist that such spending would actually hurt the economy.
Unless he can convince enough of them otherwise, Obama might be forced to make modest proposals that could not provide a major boost to the flagging recovery.
“I’ve been traveling through these small towns and talking to folks,” Obama told an audience at Northeast Iowa Community College in Peosta on Tuesday. “You do your part. You meet your obligations. It’s time Washington acted the way you do every single day.”
“We’ll get through this challenge,” Obama said.
He held two babies, bought ice cream, chatted up a high school volleyball team, and shared eggs, toast and bacon with a group of small-business executives at Rausch’s Cafe in Guttenberg, Iowa — where coffee costs 60 cents.
On Monday, Obama visited Cannon Falls, Minn., and Decorah, Iowa. He called on Congress to take several steps to help the economy, including extending unemployment insurance and renewing a 2-percentage-point payroll tax cut that is set to expire at the end of the year. Economists say a failure to extend those measures would probably put a drag on the recovery.
Obama also urged the overhaul of patent laws and the passage of three trade bills — moves that congressional leaders have said they are preparing to make. These measures are likely to help employment only over the long term.
The president also called for an infrastructure bank to pay for roads and get construction workers hired. The bank would combine federal, state and private dollars to support construction.
On Tuesday, Obama announced several measures aimed at increasing economic growth in rural communities. They would not require Congress’s approval. The administration said these measures would “leverage” existing programs, making it easier for small businesses to get loans and assisting people in finding jobs and training.
The president sought to strike a middle ground between those who say the government should play the primary role in supporting an economic recovery and those who say it has no role.
“It’s not either-or,” Obama said. “It’s a recognition that the prime driver of economic growth and jobs is going to be our people and the private sector and our businesses. But you know what, government can help.”
Briefing reporters in the presidential motorcade, White House press secretary Jay Carney said that in September, Obama “will have some new ideas” to support economic growth “beyond those that he’s discussed.”
He also said the president expects, with the conclusion of the debate over the debt ceiling, to be able to more aggressively advocate a plan to trim trillions of dollars from the federal debt over 10 years. A congressional committee that will meet starting in September is required find only $1.5 trillion in cuts.
“Having removed that threat that would have otherwise been there, the president does feel that we can now debate these issues about how best to deal with our deficits and debt,” Carney said.
While most of the people the president encountered on his tour Tuesday appeared to be fans, some had other feelings.
Obama had a slightly contentious exchange with a man at Maquoketa High School. The Iowan was concerned about whether the federal government, amid an effort to cut farm subsidies, would continue to provide assistance to farmers.
“We still need to eat three times a day,” the man said.
“That’s what I hear,” Obama said.
Larkin Rutledge, 63, of Guttenberg sat at the counter at Rausch’s Cafe but made clear that his vote will go to someone else.
“I respect his office. I respect him as a person,” Rutledge said of Obama. But his niece’s sister-in-law is Rep. Michele Bachmann (Minn.), who is running for the Republican nomination for president. “That lets you know where I stand,” he said.
In fact, Rutledge was in Waterloo with Bachmann and her family when she made her campaign announcement.
On Wednesday, Obama will head to western Illinois to host town halls in Atkinson and Alpha.