Obama Warns Eurozone Crisis Could Drag Down U.S.

In a news conference Friday morning, President Obama urged Congress to act on his proposals to create jobs. He also warned of the risks Europe could pose to the U.S. economy. And he rejected accusations that his White House leaked classified national security information for an election year advantage.

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PRESIDENT BARACK OBAMA: Imagine dealing with 17 Congresses instead of just one. That makes things more challenging.

CORNISH: That was President Obama at the White House this morning describing the challenge facing the 17 countries of the eurozone. In a news conference, the president warned that Europe's economic troubles could drag down the U.S. economy. And he urged Congress again to pass his job creation proposals. NPR's Ari Shapiro reports from the White House.

ARI SHAPIRO, BYLINE: Taken together, the countries of the European Union are the U.S.'s biggest trading partner, so if those economies fail over there, President Obama says we'll feel it here.

OBAMA: If there's less demand for our products in places like Paris or Madrid, it could mean less businesses or less business for manufacturers in places like Pittsburg or Milwaukee.

SHAPIRO: Standing behind the lectern in the White house briefing room this morning, the president said the solutions to Europe's problems are difficult, but there are solutions.

OBAMA: The good news is there is a path out of this challenge.

SHAPIRO: The president said that path must combine short term investments with long term deficit reduction. His advice for Europe, pretty much the same as his advice for American lawmakers - you can't just cut your way out of a recession, he says.

OBAMA: You can get on a downward spiral where everybody's pulling back at the same time. That weakens demand and that further crimps the desire of companies to hire more people.

SHAPIRO: With bad unemployment figures and a tight presidential race, the White House is trying to portray President Obama as a man in charge, offering solutions to the country's economic problems. Today, that man tried to suggest things are not as bad as they seem, saying the economy has created 4.3 million jobs over the last 27 months. He said the jobs that have recently been lost are largely in the public sector, from layoffs of teachers and firefighters.

OBAMA: The private sector is doing fine. Where we're seeing weaknesses in our economy had to do with state and local government.

SHAPIRO: Republicans jumped all over the president's statement that the private sector is doing fine. Campaigning in Iowa, Mitt Romney asked: Is he really that out of touch? And on Capitol Hill, House Majority Leader Eric Cantor said to reporters...

REPRESENTATIVE ERIC CANTOR: My question would be to the president, are you kidding? Did he see the job numbers that came out last week?

SHAPIRO: Later in the day, the president tried to clarify his remarks. He said it's absolutely clear the economy is not doing fine, but Majority Leader Cantor accused the president of trying to deflect responsibility for the bad economy.

CANTOR: It's not because of the headwinds of Europe. It's not despite his attempt and his party's attempts here in Congress, it is not because of House Republicans. It's because of the failed stimulus policies and other items in his agenda that small businesses in the country just aren't growing.

SHAPIRO: House Speaker John Boehner says Europe's problem is that it didn't deal with its debt soon enough.

REPRESENTATIVE JOHN BOEHNER: Remember one thing. It's the debt in Europe. And if we don't get busy dealing with our debt, we're going to be in the same shape.

SHAPIRO: But back at the White House, President Obama offered a different analysis, saying the situation in Europe is not simply a debt crisis.

OBAMA: Right now their focus has to be on strengthening their overall banking system, much in the same way that we did back in 2009.

SHAPIRO: Toward the end of his news conference, the president shifted from the economy to national security. Critics accuse the White House of leaking classified information on drone strikes and cyber attacks against Iran. They suspect the administration is staging leaks to gain an election year advantage. President Obama said that's nonsense.

OBAMA: The notion that my White House would purposely release classified national security information is offensive.

SHAPIRO: At the end of the day, Attorney General Eric Holder announced that he'd appointed two prosecutors to investigate whether any laws were broken with the leaks. Ari Shapiro, NPR News, the White House.

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