President Obama huddled with top economic advisers to discuss the faltering economy on Monday, then strode out to the White House Rose Garden to reassure Americans: "I've got confidence in the American economy, and most importantly, I've got confidence in the American people."
Obama's address represented the latest administration effort at damage control over the economy. Some leading analysts now say the nation has about a 40 percent chance of slipping into another recession.
The president didn't offer new initiatives in his speech, but used it to chastise a "partisan minority" preventing passage of a $30 billion small-business loan program that would also provide firms up to $12 billion in tax breaks.
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Republican leaders in the Senate object to extraneous expense items that have been attached to the bill and complain that Democrats have refused even to consider the three amendments to the bill Republicans have offered.
The president's remarks were unlikely to silence a growing chorus of critics objecting to his economic policies across the political spectrum.
"It's very, very clear the economic policies of the Obama administration and this Congress are failing miserably," Wisconsin GOP Rep. Rep. Paul Ryan told the media during a conference call Monday.
"All one has to do is travel throughout America and talk to an employer, talk to a manufacturer, talk to a service employer, and you'll find out that they are really nervous about this economy and they're pulling back," Ryan said. "The statistics are glaringly clear. There's real talk of a double dip."
Ryan, a member of the president's commission on budgetary reform that is expected to propose ways this year to reduce the flood of federal red ink, declared that the president's 2009 stimulus plan has failed and program will cost taxpayers $1.1 trillion once debt interest is factored in.
"The Keynesian experiment, which was more spending, has failed to produce the kinds of jobs, it didn't bring our unemployment down to 8 percent as promised," Ryan said. "We are still hovering around 10 percent. We are not producing the private sector jobs that we need to be."
The president's address followed a series of bad economic reports. On Friday, the government revised GDP growth in the second quarter down from 2.4 percent to 1.6 percent. Also last week, new home sales for July fell to the lowest levels since record keeping began in 1963.
The administration got more bad economic news Monday morning: The Commerce Department reported personal incomes rose just 0.2 percent in July. Although that was an improvement over June's numbers, it was just half the increase economists had expected. On a positive note, the department reported consumer spending rose 0.4 percent, the largest increase in four months.
Ryan estimates the U.S. economy would need to generate 250,000 jobs per month for five years in order to return the nation to pre-recession employment levels.
Instead, he said the economy "is going in the exact opposite direction that it ought to be going. Borrowing and spending isn't working, if borrowing and spending would be working, we'd be at full employment right now, because we're borrowing and spending more than we have in the modern era."
Ryan blames the fiscal policies of the federal government — taxes, talk of more stimulus, and proposed cap-and-trade legislation — for causing widespread uncertainty in the business community, which has prevented them from investing in new employees.
Obama tried to reverse that formula Monday, contending that Republican opposition to the current small-business loan legislation is placing business in a position of uncertainty.
Ryan blasted proposed tax increases scheduled to occur automatically in January when the Bush-era tax cuts expire, saying the administration and Democrats in Congress are replicating the economic policies the Japanese followed in the 1990s.
"We are buying ourselves our own lost decade," Ryan warned.
Democrats point to last week's Congressional Budget Office report stating the stimulus may have added as many as 3.3 million jobs. But former CBO Director Douglas Holtz-Eakin slammed the report on Monday for relying on the same economic models that projected the stimulus would hold unemployment below 8 percent.
"To run the computer model again guarantees you would get the same exact answer," Holtz-Eakin told reporters Monday. "And the CBO got the same answer.
"Repeating oneself doesn't change the facts," he said. "There is no new evidence that is generated that suggests the stimulus worked."
Criticism of the president's management of the economy no longer is coming just from the right.
The New York Times on Sunday published an editorial titled "Waiting for Mr. Obama." It urged: "If President Obama has a big economic initiative up his sleeve, as he hinted recently, now would be a good time to let the rest of us in on it."
The editorial continued: "The question, is whether Mr. Obama will lead." It also said, "Standing back is not doing the country or his party any good."
In his remarks Monday, the president again appeared to try to pin the blame on the Bush administration for the nation's economic woes.
"What we didn't know was that it took nearly a decade to dig the hole that we're in, and it would take longer than anyone of us would like to climb our way out," Obama said.
The economy has "come a long way" since he took office, he said, but added that too many businesses continue to struggle, and unemployment remains too high.
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