Obama says his administration has ’stopped the bleeding,’ stabilized economy, more to be done

By Erica Werner, AP
Monday, September 13, 2010

Obama says his policies have stabilized economy

FAIRFAX, Va. — Less than two months before the midterm elections, President Barack Obama is imploring voters to support his party’s economic policies, even though he acknowledged that those policies haven’t brought about a recovery fast enough for many Americans.

“We stopped the bleeding, stabilized the economy, but the fact of the matter is the pace of improvement has not been where it needs to be,” Obama said Monday during a backyard town hall in a wooded, middle-class neighborhood in Northern Virginia.

Obama said that additional economic measures — including the package of infrastructure investments and business tax incentives he proposed last week — would help accelerate growth in the short-term, while also paving the way for more sustained medium- to long-term growth. The proposals would require congressional approval, an unknown prospect given Washington’s highly partisan atmosphere.

Obama also called on the Senate to pass a small-business bill that has languished on Capitol Hill. The legislation calls for about $12 billion in tax breaks for small businesses and a $30 billion fund to encourage banks to lend to small business.

Obama spoke at the home of John Nicholas and Nicole Armstrong, who saw their retirement and college savings for their two children diminish during the economic downturn. Nicole recently decided to go back to work as a part-time administrator at a local preschool in order to increase their income.

Amid unemployment that continues to hover near 10 percent, Obama is looking to refocus his efforts on the economy, seeking to ease the worries of anxious voters and Democratic lawmakers who fear that the sagging economy could lead to sweeping losses for their party.

The president continued his attacks on House Minority Leader John Boehner, with whom the administration has been sparring over Boehner’s support for an extension of tax cuts for the top 2 percent of income earners.

“We could get that done this week, but we’re still in this wrestling match with John Boehner and Mitch McConnell about the last 2 to 3 percent,” said Obama, adding the Senate’s Republican leader to his list of targets.

At issue is a year-end deadline to renew tax cuts enacted in 2001 under President George W. Bush. Obama wants to renew the tax cuts for most people but let the rate for top earners rise back to almost 40 percent on family or small business income over $250,000, a move that the White House says would save the government $700 billion.

On Sunday, Boehner said he would support renewing tax cuts for the middle class but not the wealthy if that was his only choice. But a spokesman for McConnell said Monday that every Senate Republican would oppose efforts to extend only the tax cuts Obama is advocating.

The White House and its allies hope to use the tax-cut fight to cast themselves as defenders of the middle class and Republicans as a party eager to revive the Bush administration’s policies.

“We can’t give away $700 billion to folks who don’t need it,” Obama said.

Despite the partisan gridlock on Capitol Hill, Obama said he still believes there are opportunities for Republicans and Democrats to work together on several key issues, including bringing down the federal deficit, clean energy legislation, education and immigration reform.

Associated Press writers Julie Pace, Darlene Superville and Tom Raum contributed to this report.

(This version CORRECTS to show that a McConnell spokesman, not McConnell, commented on Senate Republicans and tax cuts.)

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