POLITICS: White House

Deja vu for Obama: Economic blues threaten second-term agenda

By |
Politics,White House,Brian Hughes,Campaign 2012,Politics Digest

President Obama opened his second term focused on gun violence and immigration. But Wednesday's bleak news that the economy is again contracting suggests that the president's next four years, like his first, will instead be defined by his handling of the long-ailing economy.

In his second inaugural address just a week ago, Obama declared that "an economic recovery has begun" and that he would turn his attention to a series of issues, from guns to climate change, important to his core supporters,

The latest economic developments, however, paint a more dismal portrait than the president suggested. The Commerce Department reported Wednesday that the U.S. economy contracted between October and December, for the first time since mid-2009. And the White House spent the day blaming both Republicans and a natural disaster, Hurricane Sandy, for the setback.

"There is more work to do, and our economy is facing headwinds ... and that is Republicans in Congress," White House press secretary Jay Carney said before conceding, "I don't think anytime you see a reduction in economic growth that it's good news."

And Alan Krueger, chairman of the Council of Economic Advisers, pointed to "signs that Hurricane Sandy disrupted economic activity and federal defense spending declined precipitously, likely due to uncertainty stemming from the sequester."

Even more important for the president, economists generally agree that the only way to significantly curtail unemployment is to maintain 3 percent economic growth over an extended period.

Obama, who through much of his first term blamed former President George W. Bush for persistently high unemployment, now faces the challenge of taking ownership of the economy. And some Republicans were quick to accuse the president of intentionally trying to distract the American public from the issue of jobs.

"For a president who barely talks about the economy anymore or the nearly 23 million Americans struggling for work, today's number might be a wake-up call," said Joe Pounder, research director at the Republican National Committee.

Yet, the strategy is paying dividends for the president. Recent polls show his approval ratings have jumped since the start of his second term.

But other analysts warned that Obama's entire agenda -- and his legacy -- could be overshadowed by economic hardships.

"The fact that the underlying economy is so anemic, it has always weakened every president eventually," said Matt Schlapp, former political director for President George W. Bush. "He won't be immune to that. It could weaken his standing on other issues."

Further complicating the economic forecast is the so-called sequestration, automatic, across-the-board spending cuts that kick in on March 1 and that economists warn could undo fragile economic gains. The Commerce Department cited the impact of those cuts on the Pentagon as the primary cause of the economy's fourth-quarter contraction.

Some of Obama's supporters still see a silver lining, saying the president could use the economic slowdown as leverage against Republicans in future fiscal battles.

"We know what will happen if policymakers don't work to scrap the so-called sequester," said Adam Hersh, an economist for the liberal Center for American Progress. "Economic growth and job creation this year and in the future will be slower than it needs to be."

bhughes@washingtonexaminer.com

View article comments Leave a comment