Worried public changes Obama deficit message

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Worried public changes Obama deficit message

Talks more about restraint as fears he's mismanaging economy grow

By TOM RAUM

updated 4:53 p.m. CT, Thurs., July 23, 2009

WASHINGTON - At a critical moment in his presidency, Barack Obama finds increasing need to talk about taming federal deficits as he struggles with a dour economy.

It's not just that Republicans are keeping up a relentless and punishing attack on his health care overhaul and other spending priorities. It's also that Americans are losing confidence in Obama's ability to lead an economic recovery. Increasingly, they are worried about their jobs and the impact of the nation's mushrooming debt on future generations.

An Associated Press-GfK Poll shows public confidence has reversed on whether the president's $787 billion stimulus package, passed by Congress in February, will ultimately work to improve the economy.

In January, 58 percent were confident it would. Now, it's the opposite, with 58 percent saying they doubt the stimulus will bring any significant improvement.

Forty-seven percent still think it's too early to pass final judgment on whether the plan is working. But of those who say they are decided, three times as many say the stimulus has harmed the economy than those who say it has helped.

Other polls have shown similar slippage on Obama's economic stewardship, although his overall approval rating remains solid — 55 percent in the AP-Gfk poll conducted July 16-20. Still, that's down nine points from April.

In contrast to the increasing public gloom, many economists see fledgling signs of an economic recovery and expect the recession to end late this year. But economists also know that, historically, job losses nearly always continue long after a recession has officially ended.

The darkening mood comes as Obama tries to rally public support for overhauling the nation's health care system, his top legislative priority, but one expected to cost about $1 trillion over 10 years. His mission is to convince the public and Congress that his health care plan will benefit Americans as well as strengthen the economy in the long run.

It's been a hard sell.

Fiscally conservative Democrats are skeptical. And Republicans have seized on the change in public sentiment to pound Obama for failing to create or save the jobs he promised while greatly overburdening the federal budget.

South Carolina Republican Sen. Jim DeMint has predicted the health care legislation could be Obama's "Waterloo moment" and could break his presidency — a remark Obama now cites as the kind of partisan politics-as-usual in Washington he is seeking to end.

"I think the Republican attack on the deficit is succeeding because it's real," said Rob Shapiro, a former economic adviser to President Bill Clinton, and chairman of Sonecon, an economic-consulting firm.

Obama is factual in saying he inherited a trillion-dollar-plus deficit from predecessor W. Bush, "but he made it worse," Shapiro said. The deficit in the current budget year is now estimated to come in at more than $1.8 trillion, pushed higher by the stimulus spending, bailouts and increasing war costs.

Shapiro said he believes White House officials are taking the GOP attacks very seriously. "They're also concerned about long-term deficits and the impact they could have on the economy and on the ability to act two, three years down the road — which of course is moving up to the re-election season," he said.

Obama clearly has been putting more emphasis on the importance of getting spending under control even as he tries to prod a recovery.

"We have to do what businesses and families do. We've got to cut out the things we don't need to pay for the things we do," Obama said at a town-hall style meeting Thursday in Shaker Heights, Ohio, a suburb of Cleveland. The meeting followed a prime-time news conference the night before in which Obama sought to rally public support for his health plan.

The AP-Gfk poll showed that 61 percent of those surveyed oppose any additional stimulus package. Nearly half, 49 percent, now say Obama is trying to change things too quickly, up from 32 percent in April. And 80 percent are worried that increasing federal debt will harm the future of their children and grandchildren.

The national debt — the total of accumulated annual deficits — is currently $11.6 trillion.

Democratic pollster Mark Mellman said "there's no question that, over time, the chief executive pays a price if things aren't going well in the economy." While Obama's overall approval rating is still strong, "the fact that it's declined makes it a little harder for him to wield the same kind of threat over Congress as he might have some months ago," Mellman said.

Some economists warn that this recession is so deep, it may take much longer than in the past for a rebound even after some economic growth resumes.

Job losses have now wiped out all the job gains since the last recession in 2001, the first time that has happened since the 1930s.

Heidi Shierholz, an economist at the Economic Policy Center, a labor-funded think tank, noted that the jobless rate continued to rise for 19 months after the 2001 recession was declared over.

"If the unemployment rate is still increasing, people are not going to feel good," Shierholz said.

Copyright 2009 The Associated Press.