Obama defends economic initiatives

By Scott Wilson
Friday, September 10, 2010; 1:30 PM

President Obama said Friday that if the midterm elections become a referendum on which political party has the most effective agenda to improve the economy, rather than a decision on its current state, "the Democrats will do very well."

"Even after all the progress we've made, we're not there yet, and that means people are frustrated, people are angry," Obama said at a wide-ranging news conference at the White House. "It's understandable that people are asking, 'What have you done?' "

Obama said he would use the fall campaign season to remind voters of the sinking economy he inherited when he took office and what measures he has since put in place, with help from a Democratic Congress.

Many of those initiatives have proved to be unpopular with much of the country, creating a political climate harmful to his party heading into the November elections. Obama has referred to those political difficulties in recent weeks, but he attempted to provide his party hope Friday by signaling that he believes the Democrats can win on the strength of their ideas.

Obama highlighted several new economic proposals this week, including business tax breaks for research and investments, that Republicans have said are designed chiefly to appeal to voters this campaign season.

"We're hardly Johnny-come-latelies on this issue," Obama said. "And when you put together what we've done, it's made a difference."

Obama took 13 questions over a 75-minute news conference in the White House East Room, ranging over issues from the rising anti-Islamic sentiment in the country to prospects for Middle East peace.

Obama used the news conference - his first since May - largely to defend his management of the economy, which is showing new signs of weakness, and to draw sharp distinctions between his party and the Republican opposition with less than two months to go before Election Day.

Some of his answers echoed the speech he has been giving across the country as he raises money for Democratic candidates before the elections. The choice he has laid out - and repeated several times Friday - is between Democratic policies he said helped pull the economy out of "a huge hole" and Republican prescriptions that he says pushed the country into recession before he took office.

He focused largely on the debate over whether to extend the Bush-era tax cuts for households making $250,000 or more - a "perfect example," he said, of the vastly different ways the parties view the economy. He called them "tax cuts for millionaires" several times.

Extending tax cuts for those higher-income households - something Republicans favor - would cost the federal government $700 billion over the next 10 years. Obama said the money would add to the deficit and would be better spent on "growing the middle class," which he said has been his primary economic goal since taking office.

In response to a question about how he has changed Washington, a central campaign theme, Obama listed a number of legislative initiatives he said made politics in the capital more responsive to middle-class concerns.

"If you are asking me why I haven't been able to put in place a better spirit of cooperation? I think that's fair," Obama said. "I'm as frustrated as anybody by it."

He said his decision to take on health care and financial regulatory reform - issues that he said have "entrenched interests" behind them "where there's a lot of money at stake" - partly explains the partisan animosity that defines the political debate in Washington. But he also acknowledged that "on the margins" he could have done more to change the tone.

On the eve of the anniversary of the Sept. 11, 2001, attacks, Obama was asked why more Americans hold an unfavorable view of Islam than at any point since the event, according to recent polls.

"At a time when the country is anxious generally, and going through a tough time, fears surface, suspicions can surface in a society," Obama said. "I think that plays a role."

He said "one of the things I admired most about President Bush" was his decision, within days of the attacks, to make clear that the United States was fighting al-Qaeda, not Islam. It was a message Obama echoed several times during the news conference, as well.

"I will do everything I can to tell the American people that we are one nation, under God - even though we may call that God different things," Obama said, adding that Muslims in the United States "are good people, they are my neighbors, they are my friends, and they are fighting alongside us in our battles."

Asked about the prospects for capturing Osama bin Laden and his deputy, Ayman al-Zawahiri, Obama said doing so would be "extremely important to our national security," although he added that it "wouldn't solve all our problems."

While saying that he believed al-Qaeda's leadership is on the run due to pressure exerted by the U.S. military, Obama warned that it will likely always be possible for "an individual or a small group" to carry out a terrorist attack.

"That threat is there," Obama said. "And I believe it is important for the American people to know that."

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