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Topics: House of Representatives

Obama struggles to pivot to economy ahead of fiscal fights

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President Obama is struggling to recast the nation’s attention on his economic agenda, with his efforts this week overshadowed by a mass shooting, the conflict in Syria and his own drawn out search for a new Federal Reserve chairman.

Obama is looking to gain crucial leverage ahead of looming fiscal fights with the GOP. With the window closing to keep the government funded and avoid defaulting on the nation’s debt, the president has a central goal: browbeating Congress in yet another showdown over Washington’s finances.

Obama began his push in July touting his economic policies in speeches around the country. But that effort was overtaken by developments in Syria with Obama forced to spend political capital rallying support against Bashar Assad’s regime.

After a diplomatic resolution last week, the White House was desperate to regain momentum behind its economic message. But Obama’s latest push, a White House speech Monday where he was joined by small business owners, was overshadowed by a shooting rampage at the nearby Washington Navy Yard.

The president also suffered a setback over the weekend when former Treasury Secretary Larry Summers withdrew his name from consideration to be the next chairman of the Federal Reserve in the face of stiff opposition from progressive lawmakers. Summers was rumored to be Obama’s top pick.

Obama, though, is pushing ahead with an aggressive approach, trying to command as much of the political limelight as possible in a distracted Washington.

Despite setbacks to his own domestic agenda — the stalling of immigration reform and a high-profile defeat on gun control — the White House argues that it has major leverage over Republicans on economic issues.

“We have the upper hand,” a senior administration official told the Washington Examiner. “That’s why you’re seeing such a forceful message. We aren’t messing around — the other side is the one with the most to lose here.”

Washington faces an October deadline for a continuing resolution to keep the government funded. And two weeks later, the nation will reach its borrowing capacity, risking possible default and another credit rating downgrade.

Recent polls show that congressional Republicans would absorb most of the blame for a government shutdown or default, which is driving the White House strategy.

With Americans uninterested in the wonky specifics of those overlapping debates, the president has calculated that his best path forward is to hammer what he sees as GOP obstructionism.

“Are some of these folks really so beholden to one extreme wing of their party that they’re willing to tank the entire economy just because they can’t get their way on this issue?” Obama said of his GOP rivals Monday. “Are they really willing to hurt people just to score political points? I hope not.”

Conservatives, however, see a central flaw in that argument.

“People disapprove of the way he’s handling the economy,” GOP pollster David Winston said. “Attitudes about the direction of the economy have gotten significantly worse over the summer. You can have policy disagreements, but to claim Republicans want to destroy the economy — he really does overplay his hand.”

Obama is running into the same problem that has undercut his message since entering office. He’s not arguing that America has returned to economic prosperity but that the situation would have been much worse without his administration’s policies.

The unemployment rate has certainly come down from the height of the recession, but only 63 percent of Americans are now participating in the labor force — the lowest rate in 25 years.

Republicans dismiss Obama’s argument as another attempt to blame economic shortcomings on his predecessor, President George W. Bush.

Washington insiders also say the coming debt-ceiling debate is particularly challenging for the White House as congressional Republicans believe they have more leverage to extract spending cuts in those talks than during negotiations to avoid a government shutdown.

Many GOP lawmakers hope to condition a debt-limit hike on further spending cuts and possible entitlement reforms. Obama, though, insists he will not negotiate around the debt ceiling.

“Despite their objections, the White House will end up negotiating with the Republicans,” predicted GOP strategist Ron Bonjean. "They own the economy. He can’t refuse to negotiate and then just watch the country go into default.”

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Brian Hughes

White House Correspondent
The Washington Examiner