Economy Casts Pall On Administration's Goals The lackluster economy has hung over everything the Obama administration tried to do this year. Rising unemployment dogged the president throughout his first year in office. Obama spent several days huddled with economic advisors before leaving on his Hawaiian vacation. The White House faces many challenges as it tries to put more people back to work in 2010.
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Economy Casts Pall On Administration's Goals

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Economy Casts Pall On Administration's Goals


It's MORNING EDITION from NPR News. Good morning. I'm Steve Inskeep.

We're spending a good part of today's program getting a snapshot of the biggest story in 2009. No doubt, it will be among the biggest stories of 2010. That story is the economy. It started the year down, then seemed to get worse. Now, it's improving, though, as we will hear in a moment, not for everybody. We'll meet an Upstate New York couple adjusting their lives after losing their jobs. We start with President Obama, for whom the most urgent of many urgent tasks may be to fix the economy.

Here's NPR Scott Horsley.

SCOTT HORSLEY: For 11 of the last 12 months, high unemployment has hung like a dark cloud over the country and the White House. Finally, in early December, a little ray of sunshine peeked through. Mr. Obama talked about it during a visit to Allentown, Pennsylvania.

President BARACK OBAMA: As we come to the end of this very tough year, I want to do something I haven't had a chance to do that often during my first year in office, and that is to share some modestly encouraging news on our economy.

HORSLEY: The nation's jobless rate had unexpectedly inched down, and while employers still aren't hiring workers, job losses have slowed to a trickle. That's news the president and his economic advisers, like Christina Romer, have been hoping for for months.

Ms. CHRISTINA ROMER (Chairperson, Council of Economic Advisers): We've been through this very, very severe recession. And, of course, I often quote the vice president, who says: "not as bad isn't good enough." Right? And absolutely, what we want is to get to positive job creation. But certainly, moderating job loss is a step along the way.

HORSLEY: Jobs have become a crucial barometer for the president, who took office in the middle of the worst recession in at least a generation. Even before his swearing in, Mr. Obama was lobbying Congress to pass a huge economic stimulus package. The package worked like sandbags piled on an economic levy, but the recessionary waters kept on rising. The administration had predicted the stimulus would keep unemployment below eight percent, but the jobless rate soared pass that, toping 10 percent this fall. Chief Economist Nariman Behravesh of IHS Global Insight says the president's team made an honest mistake.

Mr. NARIMAN BEHRAVESH (Chief Economist, IHS Global Insight): They and many other forecasters did not realize how bad this recession was going to be and how high the unemployment rate was going to go. That said, they probably oversold it a little bit in terms of its impact, but it has had an effect. It has prevented things from getting worse.

HORSLEY: Behravesh says the stimulus, along with actions by the Federal Reserve, ought to get some credit for getting the economy growing again in the second half this year. But that's little comfort to the one in 10 Americans who are still looking for work. What's more, the stubbornly high unemployment rate has eroded confidence in the government's ability to tackle other problems. While two-thirds of the stimulus money has yet to be spent, idle workers are getting impatient. And Behravesh says that's why the president's back to pushing programs to boost hiring, such as spending on infrastructure and home energy retrofits.

Mr. BEHRAVESH: From an economic perspective, it's not clear that we need more stimulus. From a political perspective, clearly, the Democrats and the administration are worried about the mid-term elections. So they want to be seen as doing something rather than nothing.

HORSLEY: Republicans are also eyeing the mid-term elections and show no signs of supporting the administration's efforts. The original stimulus passed with only a few Republican votes in the Senate and none at all in the House. Mr. Obama complained this month that what Democrats have done to address the economy, they've had to do on their own.

Pres. OBAMA: We were forced to take those steps largely without the help of an opposition party, which, unfortunately, after having presided over the decision making that had led to the crisis, decided to hand it over to others to solve.

HORSLEY: Administration officials were asked this month whether in hindsight, knowing how deep the recession would be, a larger stimulus might have been in order. Spokesman Robert Gibbs answered with what's become a common refrain at the White House: We took what we could get.

Scott Horsley, NPR News, Washington.

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