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Obama Says Challenges to U.S. Economy ‘Still Great’

Wednesday, 29 Sep 2010 01:45 PM

 

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President Barack Obama said his economic policies are designed for a long-term effect and the U.S. still faces hurdles in the coming months, including restoring the millions of jobs lost during the recession.

The president cited his initiatives to overhaul financial regulations and the health-care system, to improve public education and to boost the alternative-energy industry, saying they provide a foundation for future prosperity.

“The challenges the economy faces are still great and they’re not going to go away tomorrow or the next day, but we’re on the right path,” Obama said to a group of voters in the backyard of a home in Des Moines, Iowa, his third stop on a four-state trip.

Obama combined a defense of his plans with criticism of Republican proposals as he and Democrats are gearing up for the November congressional elections. The president and other members of his administration have been attempting to combat apathy among Democrats in a midterm election year when turnout typically lags.

Obama said Republicans haven’t been honest about what must be done to bolster economic growth.

“Tough choices” still need to be made on taxes and the budget in the months ahead, he said. The administration projects the deficit will hit a record $1.47 trillion this year.

“We’re not going to be able to solve our big problems unless we honestly address them,” Obama said. “We can’t pretend that there are shortcuts.”

Criticism of Republicans

He singled out for criticism Republican efforts to extend income-tax cuts to the top earners in the U.S. that were passed under former President George W. Bush. Obama said he wants to extend the tax cuts for families making less than $250,000 a year. The U.S. can’t afford to keep them for those making more, he said.

“We lopped off taxes and we didn’t pay for it and that’s the single largest contributor to the deficit,” Obama said in response to a question from an audience member.

Obama said he favors lowering the tax rate on corporations. “But the way to do that is to eliminate all the loopholes,” he said.

He also said the U.S. faces “hangover costs” from the wars in Iraq and Afghanistan, including the cost of caring for wounded veterans. Obama promised that his administration will take a “serious look” at the cost of weapons programs to hold down the deficit.

The economy is the biggest issue for voters in the November election and Republicans are campaigning against Obama’s policies in their attempt to overturn Democratic majorities in the House and Senate.

Jobs Lost

The 18-month recession, which ended in June 2009, led to the loss of more than 8.4 million jobs, drove the unemployment rate close to a 26-year high and contributed to a 26 percent decline in the median home price. Consumer spending, which accounts for about 70 percent of the economy, last year declined the most since 1942.

From Des Moines Obama will travel to Richmond, Virginia, for a similar event this afternoon before returning to Washington. He stopped yesterday in Albuquerque, New Mexico, and Madison, Wisconsin.

Obama told a crowd of mostly college students at the University of Wisconsin in Madison last night that political analysts are predicting a Democratic “bloodletting” in the elections because his supporters have lost their enthusiasm.

‘Cannot Sit This Out’

“They’re basically saying you’re apathetic, you’re disappointed,” he said. “We cannot let that happen. We cannot sit this out.”

The stakes are high for Obama and the Democrats. Republicans need a net gain of 39 seats to gain a majority in the 435-member House of Representatives. The non-partisan Cook Political Report in Washington forecasts Republicans will gain at least 40 seats after November’s election. In the Senate, where Republicans hold 41 of 100 seats, the Cook report says they are poised to pick up from seven to nine seats.

--With assistance from Timothy R. Homan and Alexandra Harris in Washington. Editors: Joe Sobczyk, Laurie Asseo.

To contact the reporters on this story: Hans Nichols in Des Moines Iowa, at hnichols2@bloomberg.net; Nicholas Johnston in Washington at njohnston3@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva@bloomberg.net

© Copyright 2014 Bloomberg News. All rights reserved.

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