July 24, 2013 9:35 pm

Obama attacks Republicans on economy

Barack Obama on Wednesday laid the blame for the US economy’s slow recovery at the feet of Republicans in Congress, accusing them of being more interested in scoring political points than acting to boost growth.

At the start of a series of events aimed at focusing on the lacklustre economy, the president came out swinging, criticising the “sizeable group of Republican lawmakers” who preferred to use the “meat cleaver” of budget sequestration and had “gutted a farm bill that America’s farmers and most vulnerable children depend on”.

“With an endless parade of distractions, political posturing and phoney scandals, Washington has taken its eye off the ball,” Mr Obama told a friendly crowd at Knox College in Illinois, where he gave his first major address after being elected a senator in 2004. “And I am here to say this needs to stop.”

Sequestration – the automatic spending cuts that began in March and are worth $1.2tn over the next decade – had cut government programmes indiscriminately, he said, and was no substitute for proper action.

The president said Congress needed to move past “short-term thinking and stale debates” and focus “on the basic economic issues that matter most to you – the people we represent”.

Even as he delivered these barbs, Mr Obama called on Republicans in Congress, as well as Democrats, to propose ideas for boosting the economy and creating jobs – and warned that he would use the power of his office if they did not act.

“I will not allow gridlock, inaction, or wilful indifference to get in our way,” he said. “Whatever executive authority I have to help the middle class, I’ll use it. Where I can’t act on my own, I’ll pick up the phone and call CEOs, and philanthropists and college presidents – anybody who can help – and enlist them in our efforts.”

Mr Obama has limited ability to take action without Congress’s support. But after months of scandals – including revelations that his administration had expanded broad surveillance programmes – the president is attempting to put the spotlight back on the economy.

Second-quarter gross domestic product data due at the end of this month are expected to be weak, and the unemployment rate remains stubbornly high at 7.6 per cent.

Economic issues will loom large on the political agenda over the rest of this year, with Congress due for another budget showdown.

Congress needs to agree on a funding bill by the end of September to prevent a partial government shutdown, and then it will have to raise America’s borrowing limit again – threatening a repeat of the bitterly partisan fight that in 2011 brought the country to within hours of defaulting.

To try to get the economy back on its feet, Mr Obama said that he would “push new initiatives to help more manufacturers bring more jobs back to America” and would “push to open more manufacturing innovation institutes that turn regions left behind by global competition into global centres of cutting-edge jobs”.

“Let’s tell the world that America is open for business,” he said.

On the second leg of his economy tour, Mr Obama will on Thursday travel to the port of Jacksonville, Florida to “offer new ideas for doing what America has always done best: building things”.

“As a share of our economy, we invest less in our infrastructure than we did two decades ago,” the president said, noting that more than 100,000 bridges in the US were old enough to qualify for Medicare, the healthcare programme for the over-65s.

“That’s inefficient at a time when it’s as cheap as it’s been since the 1950s,” he said.

Mr Obama also said he would renew his push to provide better access to pre-school for Americans and make schools more technologically connected, calling education a “cornerstone of a strong middle class”.

I’m also going to use the power of my office over the next few months to highlight a topic that’s straining the budgets of just about every American family – the soaring cost of higher education

- Barack Obama

“If you think education is expensive, wait until you see how much ignorance costs in the 21st century,” he said.

“I’m also going to use the power of my office over the next few months to highlight a topic that’s straining the budgets of just about every American family – the soaring cost of higher education.”

Congress is now working on a deal on student loan interest rates, which doubled this month after Republicans and Democrats could not come to an agreement.

In a speech that tapped into the core economic concerns of middle class Americans, he also pledged to work to make it easier for “responsible families” to buy homes or refinance mortgages, and promoted immigration reform as a way to boost the working population and ensure retirement plans would be funded in the future.

Big business welcomed the renewed focus on the economy, even as it warned the president to be careful not to impose new regulations or restrictions.

“The president correctly underscored the importance of infrastructure, education and immigration to our economic future,” said Tom Donohue, president of the US Chamber of Commerce. “But in order to grow and create lasting private sector jobs, we must have more economic freedom and while reining in government spending, taxes and debt,” he said.

Copyright The Financial Times Limited 2015. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.


Sign up for email briefings to stay up to date on topics you are interested in