Hiring is picking up, and consumer confidence and the housing market are showing signs of life, but the U.S. economy still is lumbering to reach a full recovery, posing a political threat to President Barack Obama as he travels to Illinois on Wednesday to deliver what the White House bills as a major speech on the economy.
Compromise is elusive in deeply partisan Washington, and there are limited steps the executive branch can take to move the economic needle. The speech comes as some economic indicators continue to show only modest rebounds and months before Obama and Republican lawmakers face a renewed clash over spending and the federal budget.
But Obama and his aides said the speech comes as the economy is stabilizing after a deep descent, offering the president an opportunity to rise above the daily chatter and offer his vision for restoring the middle class’s ability to achieve the American Dream.
“This is a long-term project,” Press Secretary Jay Carney said Tuesday. “It’s not enough just to see the stock market bounce back. . . . We need to do more.”
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The speech comes six months into Obama’s second term – which has been buffeted by a series of what Carney called “fake scandals,” as well as a failed effort to secure gun control legislation. But White House aides say it gives Obama an opportunity to refocus attention on the economy.
But the public remains skeptical.
“The public view is that we’re still on pretty rocky ground,” said Carroll Doherty, an associate director at the Pew Research Center for the People & the Press, which measures perceptions of economic news and opinions about the national economy. A survey Pew released Tuesday shows 44 percent of Americans say it will be a “long time” before the economy fully recovers – though the recession officially ended in 2009.
“Job growth has been steady but not overwhelming and not nearly enough to budge these perceptions,” Doherty said. Obama’s overall job rating in the poll, which was more positive than negative in both May and June, is now evenly divided: 46 percent approve of his job performance while 46 percent disapprove.
A new McClatchy-Marist poll released Monday found Obama suffering his lowest job approval numbers in nearly two years. It found just 37 percent of the respondents approved of his handling of the economy, while 56 percent disapproved.
Although some indicators, including new job growth, have improved, Scott Anderson, the chief economist of San Francisco-based Bank of the West, said projections of the gross domestic product – the sum of goods and services in the U.S. economy – remains below the rate necessary for a full recovery.
“That’s not the direction you want to go, and it’s a bit troublesome and problematic for the president,” Anderson said.
The pressure may increase on both Congress and Obama, with the Federal Reserve appearing “anxious to exit” and end its extraordinary efforts to stimulate the economy, Anderson said.
“That increases the reliance on the executive and legislative branches to keep the economy going,” Anderson said.
The effort to reframe the debate over the economy comes as Obama and Congress appear poised for a new round of battles over raising the debt ceiling – a fight that was expected to happen over the summer but that has been pushed into the fall, given stronger than anticipated revenue.
Republicans in the House of Representatives want to use an increase in the debt limit as a vehicle for more spending cuts, though Carney said Tuesday that the White House “won’t negotiate” over lifting the limit to pay the country’s bills. Economists believe that some of the spending cuts, particularly in defense, already are slowing the overall rate of economic growth.
Polls suggest the battle wouldn’t be favorable ahead of the 2014 congressional elections. The Pew survey released Tuesday found that views of Congress remain historically negative and have never recovered from the 20-year low they hit in August 2011 after the last contentious debt ceiling debate.
White House aides insisted the speech will look beyond congressional budget squabbles and won’t serve as a to-do list for Congress. Obama’s past efforts to goose the economy met with considerable opposition from House Republicans.
Still, Obama told supporters on Monday night that he plans to follow up his broad theme of ensuring economic security “with a series of more concrete proposals,” some of which may be new.
Looking to rally his supporters ahead of his speech, Obama on Monday night said his remarks will focus on long-term threats to middle class prosperity that existed before the most recent crisis, including the loss of jobs to technology and globalization.
“I’m going to talk about where we need to go from here; how we need to put behind us the distractions and the phony debate and nonsense that somehow passes for politics these days, and get back to basics,” Obama told activists with his political organization, Organizing for Action. He pledged that his speech would “refocus on what it is that everybody is talking about around the kitchen table, what people are talking about day to day with their families."
Republicans dismissed Obama’s focus on the economy as an effort to seek more spending.
“If the president was serious about helping our economy, he wouldn’t give another speech, he’d reach out and actually work with us,” House Speaker John Boehner said Tuesday.
The speech, at Knox College in Galesburg, Ill., will be the first in what aides say will be a series of economy-related speeches, delivered in various states and in Washington.
The kickoff marks Obama’s return to Knox College, where the then-U.S. senator in June 2005 delivered a commencement address that his aides consider critical to understanding his governing philosophy.
In that pre-financial crisis speech, Obama argued that the United States’ political stability could be traced to “our sense of mutual regard for each other, the idea that everybody has a stake in the country, that we’re all in it together and everybody’s got a shot at opportunity.”