Obama launches big week on economy

(Reuters) – President Barack Obama launches several economic initiatives this week aimed at generating some desperately needed U.S. job growth and limiting predicted Democratic losses in November 2 congressional elections.

Struggling to persuade Americans that his economic policies are working, Obama will use appearances to set the tone for the autumn campaign.

The argument he will make on trips to Milwaukee and Cleveland and a rare White House news conference is this: Democratic policies have stopped the bleeding and produced some economic growth. Yes, more needs to be done, but Republicans would bring back ideas, he will argue, that propelled the country into the deepest recession in 70 years.

Obama is to make his case with a speech in Milwaukee to a labor rally on Monday, the Labor Day holiday that marks the informal start of the election campaign season.

His visit to Cleveland on Wednesday promises to be more substantive. It is the same city where the top Republican in the U.S. House of Representatives, John Boehner, recently urged the president to fire his economic team.

Administration officials said he will propose making permanent the business tax credits for research, which the White House projects will cost $100 billion over 10 years and would be paid for by ending some corporate tax breaks.

Other items that could also be talked about Obama are a payroll tax holiday, extending tax cuts for the middle class and increasing money for infrastructure spending and clean energy.

STALLING RECOVERY?

The Obama administration is scrambling for solutions to a stubbornly high 9.6 percent unemployment rate and invigorate an economy whose recovery from the recession is in danger of stalling.

University of California economics professor Laura Tyson, a member of the president’s economic advisory board, said targeted job policies such as a partial payroll tax holiday and permanent tax cuts for research and development should be priorities in the current environment.

“All of us here agree we need targeted policies for jobs and right now the deficit is not a major issue,” Tyson told CBS’s “Face the Nation” program on Sunday. “The major issue is a slow economy, lack of jobs … we really need to get our priorities right and focus on targeted job creation.”

The White House says patience will be required.

“It took years to create our economic problems, and it’ll take more time than any of us would like to fully repair the damage,” said White House communications director Dan Pfeiffer. “There are no silver bullets and anyone who is promising them is not being straight with the American people.”

Democrats are facing an angry electorate that could end their one-party rule in Washington. Many experts believe Democrats could lose control of the House on November 2 and perhaps even the Senate, which would make it harder for Obama to advance his domestic agenda on issues like climate legislation – Reuters