Laying out his economic argument at a morning news conference, Obama said that cutbacks in state and local government spending have slowed the nation’s recovery and that Congress has “no excuse” for not supporting his jobs bill that would provide funding to retain public workers.
“The private sector,” the president added as a point of comparison, “is doing fine.”
The remark struck a discordant political note in the current economic climate, and Republican adversaries pounced on the assertion to lampoon him for being out of touch. And at least politically, Obama played directly into the GOP argument that he does not understand the depths of the economic crisis and that he is too dependent on government to solve the economy’s problems.
At a campaign appearance in Council Bluffs, Iowa, presidential rival Mitt Romney accused Obama of an “extraordinary miscalculation” that will “go down in history.”
“Is he really that out of touch?” Romney said. “He’s defining what it means to be detached and out of touch with the American people.”
Obama aides scrambled to contain the fallout, complaining that Republicans had intentionally mischaracterized the president’s remarks. But by midafternoon, after the White House had lost another round of the news-cycle wars, Obama felt compelled to clarify his position.
“It’s absolutely clear the economy is not doing fine,” Obama said, speaking to reporters from the Oval Office after meeting with Philippine President Benigno Aquino III. “The economy needs to be strengthened. I believe that there are a lot of Americans who are hurting right now, which is what I’ve been saying . . . since I came into office. And the question then is, what are we going to do about it?”
The episode reinforced the impression that the White House and the Obama campaign were struggling to regain their footing after a difficult week, and that they clearly remained off balance.
Over the course of seven days, Obama endured the Labor Department’s dismal May jobs report, Republican Wisconsin Gov. Scott Walker’s victory in a recall election against an Obama-endorsed challenger, and former president Bill Clinton arguing in favor of temporarily extending the George W. Bush-era tax cuts for the wealthy, which Obama opposes.
In addition, the Romney campaign for the first time raised more money, reporting a $77 million haul in May compared with the Obama campaign’s $60 million.
The president’s setbacks have coincided with a tightening of the polls in the presidential race as Romney has closed the gap with the president at a faster clip than even some GOP political analysts had envisioned.
Matthew Dowd, a strategist for Bush’s 2004 presidential campaign, said that although Obama’s campaign team had prepared to face Romney for more than a year, its message has been muddled. The Obama team has attacked Romney as a “flip-
flopper” and as an “ultra-right-wing conservative,” Dowd said, before more recently questioning his background in the private sector.
“I would have thought they’d be prepared with a singular disqualifying argument on Romney and prosecute the case fully and forcefully for the past five or six weeks,” Dowd said. “They’ve done neither.”
Perhaps more than Romney, however, it is the relentless nature of the European debt crisis that poses the biggest threat to the Obama campaign. The crisis threatens to further curtail U.S. growth with dire consequences for the economy, but solutions remain well out of the president’s control.
William Galston, a senior fellow at the Brookings Institution, argued recently that the election hinges more on the fate of the economy this year than it has in decades.
To Galston, Obama has focused too much on trying to define Romney rather than offering a compelling case to voters that he is making progress on the economy. In May, the economy added just 69,000 jobs — one-third as many as two months before — and the unemployment rate ticked up to 8.2percent.
“Obama has a lot riding on the credibility of his basic economic message of ‘We’ve surmounted a crisis, we’re moving in the right direction — maybe not fast enough, but why would we turn back?’ ” Galston said.
The president’s worry over Europe was evident Friday, when he opened his news conference by renewing calls on euro-zone leaders to strengthen their currency through a combination of growth initiatives and financial austerity measures.
Later in the day, Obama called French President Francois Hollande, whose push for new spending to help stimulate growth dovetails with Obama’s message in the United States. Obama and Hollande discussed their strategy ahead of the Group of 20 economic summit in Mexico in two weeks.
But the president offered no new economic proposals for growth at home. Instead, he urged Congress to reconsider its opposition to the American Jobs Act that his administration rolled out in the fall.
Although lawmakers did approve some of that bill’s provisions, including an extension to the payroll tax cut and long-term unemployment insurance, major initiatives aimed at giving states money to retain teachers, firefighters and police officers were blocked by Republicans.
During his remarks, Obama noted that the economy had added 4.3 million jobs over the past 27 months, but he stressed that public-sector employment has lagged because of deep cuts to state and municipal budgets.
In Iowa, Romney ridiculed Obama’s call for “another stimulus” to hire more government workers, and he cited the results of the Wisconsin recall election as evidence that the public was fed up with big government — Walker won reelection despite enraging unions after pushing to eliminate collective-bargaining rights.
Obama “says we need more firemen, more policemen, more teachers. Did he not get the message of Wisconsin?” Romney said. “The American people did. It’s time for us to cut back on government.”
Mark Zandi, chief economist for Moody’s Analytics, said that Obama was accurate to argue that the private sector, which is growing at a rate of 3 percent, has outpaced the public sector.
Yet Zandi added that while the private-sector pace would be acceptable in a healthy economy, it is “not anything anyone will feel comfortable with given the 8.2 percent unemployment rate. That’s not fine.”
Staff writer Philip Rucker in Iowa contributed to this report.