US President Barack Obama went to a busy window--manufacturing plant near Washington on Friday to promote his economic policies and his new team of advisers as the monthly jobs report reflected only modest employment growth.
“We will not rest until we have fully recovered from this recession,” the president told workers.
Only hours earlier, the chairman of the US Federal Reserve told Congress that while he expected the economy to be “moderately stronger” this year, it would be several years before the jobless rate fell to more normal levels.
That suggests Obama is likely to face relatively high unemployment rates for the rest of his term. In responding, the president and his economic advisers will focus on getting the most bang for the buck from existing stimulus measures. New initiatives will tend not to carry a big price tag that adds to the growing national debt, officials say.
For example, aides say, Obama is exploring whether to seek an overhaul of the corporate tax system by closing myriad tax breaks and using the savings to cut business taxes. That might spur investment and jobs.
After two years of responding to the economic crisis he inherited, Obama starts the second half of his term managing the slow recovery and building on what he calls a “foundation” for growth. In his view, this includes the two-year stimulus package with its increases for education, research and work-training programs; stronger financial industry regulations; the overhaul of the healthcare system; and, most recently, the tax cuts that Obama and Republican leaders agreed to last month.
Yet Obama will have to defend his foundation even as he seeks to solidify it: Newly empowered Republican lawmakers have taken office this week with an economic agenda that calls for tearing down the stimulus spending initiatives, the healthcare law and the financial regulations, as well as any new administration regulations.
Last month’s enactment of the bipartisan package of business and individual tax cuts, which few had expected before the lame-duck Congress met, helps explain the relative scarcity of new administration ideas, officials say.
“We accomplished what were our main ideas for bipartisan agreement going forward,” said one official, who spoke on the condition of anonymity.
Chief among those ideas was a cut of 2 percentage points in workers’ payroll taxes for Social Security, a reduction that has begun showing up in paychecks this week. Obama alluded to that in his remarks to employees at the Thompson Creek Window Co in Landover, Maryland.
Another was a proposal to allow businesses to write off the full cost of some equipment and other capital investments this year, as Thompson Creek’s owners plan to do in expanding its factory and work force this year.
Obama, in his appearance alongside four of his newly named economic advisers, made clear that his emphasis would be on promoting the measures already on the books.
“Part of this team’s mission in the months ahead will be to maximize the steps we’ve taken to spur the economy,” he said.
He also spoke as if to a national audience, salesman-style, through the nearby TV cameras.
“Companies who are listening out there: If you are planning or thinking about making investments sometime in the future, make those investments now and you’re going to save money,” he said. “And that will help us grow the economy.”
Obama introduced Gene Sperling as his new director of the National Economic Council, charged with coordinating policies and brokering differences within the administration. Sperling held the same job under then-US president Bill Clinton; he replaces Lawrence H. Summers, who returned to Harvard University.
“One of the reasons I’ve selected Gene is he’s done this before,” Obama said.
During the Clinton administration, Obama added: “He helped formulate the policies that contributed to turning deficits to surpluses and a time of prosperity and progress for American families.”
With the elevation of Sperling, who has been a counselor to the Treasury Secretary Timothy Geithner, Obama has replaced three of the four principals of his original team. When he took office, he chose people with experience in global economics and financial crises, including Summers and Geithner, the only remaining member of the original group.
Now Obama has turned to pragmatic liberals with experience in the policy-making bureaucracy — and negotiating with Republicans in Congress.
He previously chose Jacob Lew as budget director — the same job that Lew had under Clinton — to succeed Peter Orszag, who has taken a job with Citigroup. And last summer Obama promoted Austan Goolsbee, a former campaign adviser, as chairman of his Council of Economic Advisers after Christina Romer returned to the University of California, Berkeley.
Also on Friday, Obama promoted Jason Furman, who remains as deputy director of the National Economic Council, but with a higher rank. He nominated Katharine Abraham to take the third seat on the Council of Economic Advisers, which opened when Goolsbee became chairman, and Heather Higginbottom, a White House domestic policy adviser, to be Lew’s deputy budget director.
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