After months of warning the economy would get worse, and then speaking of reasons for hope, the Obama administration is shifting course and declaring the nation’s financial picture is looking better.
“It is safe to say we have stepped back from the brink,” President Barack Obama told supporters at a fundraiser in Beverly Hills, Calif.
Recent positive signs from the economy bolster the administration’s contention. Home resales are up, along with consumer confidence.
The administration this week released a report showing the president’s $787 billion stimulus program was showing results.
At the same time, unemployment rose to 8.6 percent in the past week, and a new study by the Mortgage Bankers Association found about 12 percent of home loans nationwide — about 5.4 million — are delinquent or facing foreclosure, a slight increase over last year.
The consensus of economists is that the economic contraction appears to be slowing, but there are no signs of growth. Administration officials, while still warning of a long recovery, are highlighting the positive more lately.
“This is no simple task, and the economic troubles that we face are the result of years of neglect,” said Rob Nabors, White House deputy budget director. “We can’t reverse that damage in 100 days, but we are starting to turn the corner.”
Obama has called job growth his “first priority” and said jobs would be a good indicator of whether his economic programs were working.
Republicans hit back on rosy forecasts from the White House, saying the stimulus program is falling short.
“It hasn’t created the jobs American families hoped for,” said House Republican leader John Boehner of Ohio.
The White House contends the stimulus bill has saved or created nearly 150,000 jobs. Jared Bernstein, chief economic adviser to Vice President Joe Biden, who is overseeing the administration’s recovery efforts, said their plan anticipates creating or saving 600,000 jobs in the next 100 days.
“Our administration believes that we are far, far from out of the woods,” Bernstein said. “The fact that we losing fewer jobs is not good news. From our perspective, the American economy will not be fully up and running until we see robust job growth.”
Even so, the administration takes multiple political risks by suggesting the economy is turning a corner — including the possibility that the economy does not soon show improvement.
A too-optimistic stance by the president could strike a bad note among Americans still struggling with the fallout of a tough economy.
In addition, Obama has predicated his economic policymaking on the presence of a crisis. An improving economy could put his dramatic federal spending, industry bailouts and other initiatives in a less favorable light.
“We are just at the start of this,” Obama said. “We are going to keep on going through this year and into the next year, because we are going to make sure that not only are we putting people back to work [but] that we’re laying the foundation for a better economy.”
