Obama's Next Challenge: Reboot The Recovery

There are growing fears that the recovery may be slowing down. The housing market is at a standstill, consumer spending is down and people are still losing jobs. Host Scott Simon talks to NPR News Analyst Juan Williams about what this means for President Obama's agenda.

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SCOTT SIMON, host:

Back in Washington, D.C., President Obama has to turn his attention to the economy. There are growing fears that the recovery may be slowing down. The housing market's at a standstill, consumer spending's down, people are still losing their jobs.

We're joined now by NPR news analyst Juan Williams. Juan, thanks for being with us.

JUAN WILLIAMS: Good morning, Scott.

SIMON: And let's start with jobs, because this really has become the centerpiece of concern now, all throughout the government. Yesterday's report by the Labor Department was mixed - 125,000 people lost jobs last month. A lot of that was the temporary jobs created by the Census. Stimulus money is all spent, right?

WILLIAMS: Yeah.

SIMON: What can the government do to create jobs?

WILLIAMS: Well, in fact, this morning President Obama in his radio Internet address said the economy's moving in the right direction but it's just not fast enough. And beyond blaming Republicans for not having a jobs bill, he, President Obama, then cited what he called good news. Things like, you know, creating 600,000 jobs in the private sector this year, and that's a big shift from last year, when in the first six months the U.S. lost 3.7 million jobs.

So when you stop and think about it, where is the growth right now? Education, health services, hospitals, leisure. The losses are in construction, state and local government, the Census jobs that you were talking about. So that's where the issue is right now to try to find areas of the economy that can grow.

SIMON: And is there some political friction in that fact that according to polls people are more and more concerned about the size of the deficit, about how much...

WILLIAMS: No question.

SIMON: ...the government has been spending?

WILLIAMS: You know, jobs are the number one issue, but then ironically deficit spending is the number two issue. And there's some tension there because there's pressure on the government, as you hear from President Obama, to put more money into jobs stimulus spending. And then you hear the response, especially from the Republicans, that the deficit is just ungainly and it's not the appropriate time to be spending money when we have such concerns that the deficit may sink us.

SIMON: Yeah. And I hear there's an election coming up in November too, right? Which doesn't always help the reconciliation process, does it?

WILLIAMS: No. And you know, the thing is, President Obama, for example, when he announces - he announced today $2 billion for new solar energy projects, the idea, he says, is to create jobs. He wants to create new industries, economies, that will take root in the U.S., like, you know, greening - green jobs and the like.

So that's what he's trying to do: find those emerging industries that maybe are coming from Europe or Asia and say, no, no, let's have them here in the United States as job creation machines.

SIMON: And of course this week the Senate adjourned without passing an extension of unemployment benefits for people who've been out of work for six months. This becomes a campaign issue?

WILLIAMS: Big campaign issue and it's a problematic one for Republicans if they are perceived as being insensitive or uncaring for people, many of whom are now suffering what we call long-term unemployment, more than 27 weeks. You know, and the state governments, everybody else, is screaming because they're feeling increased economic pressure as well.

So spending for things like Medicaid and on the poor could be impacted directly as well as unemployment. So it's a really difficult one to figure out.

SIMON: So - but whatever you do, don't add to the deficit.

WILLIAMS: That's...

SIMON: That's what the instructions of the polls seem to be.

WILLIAMS: That's the whole thing.

SIMON: Republican National Committee chairman Michael Steele apparently - I guess it was a voter, at an appearance in Connecticut that he thought, apparently thought was off the record, called the war in Afghanistan the war of Obama's choosing. There have been calls from some big name Republicans for him to resign.

WILLIAMS: Bill Kristol, the editor of the Weekly Standard, said it's Fourth of July weekend, do the patriotic thing and step down. Republicans, as you know, Scott, have been tremendous supporters of the war in Afghanistan. And for the chairman of the Republican Party then to turn around and say this is Obama's war really struck Kristol wrong.

You know, Michael Steele called me yesterday. I think it's evidence that he feels he has to play the defense, especially with the media. It's a tough moment for him. My guess is he'll survive.

SIMON: NPR's Juan Williams. Thanks so much.

WILLIAMS: You're welcome.

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