Obama Campaign to Regain Initiative on Economic Agenda

July 24 (Bloomberg) -- Bloomberg News White House correspondent Julianna Goldman previews today's speech by President Barack Obama that will set in motion a series of events focused on the U.S. economy. WPP CEO Martin Sorrell also talks about how public perception is shaping politics for the White House and Congress. They speak on Bloomberg Television's "Bloomberg Surveillance."

President Barack Obama, looking ahead to renewed battles with Congress over fiscal policy and the debt ceiling, is seeking to revive his stalled economic agenda with a series of speeches over the next several weeks.

Starting with an address tomorrow in Galesburg, Illinois, Obama isn’t planning any dramatic steps designed to break a deadlock with Republicans.

Rather, his aides said, Obama wants to turn attention back to the economy -- and how his policies have added to job growth and stability -- following months during which the focus has been on the president’s second-term job appointees, his push for a revision of immigration policy, attempts to block his signature health-care law and Republican-led investigations into his administration.

“The president thinks Washington has largely taken its eye off the ball on the most important issue facing the country,” Dan Pfeiffer, a senior adviser, said in an e-mail to supporters over the weekend.

Obama, in remarks last night to backers gathered at a Washington hotel, said his speech “is going to be the kickoff to what is essentially several months of us getting Washington and the press to refocus on the economy and the struggles of middle class families.”

Photographer: Andrew Harrer/Bloomberg

U.S. President Barack Obama in the East Room of the White House in Washington, D.C. Close

U.S. President Barack Obama in the East Room of the White House in Washington, D.C.

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Photographer: Andrew Harrer/Bloomberg

U.S. President Barack Obama in the East Room of the White House in Washington, D.C.

In remarks at a dinner following the gathering, he said his Galesburg speech will include some proposals “which I’ve made before,” and some “which will be new.” He also said, “And so I’m excited about the speech, not because I think the speech is going to change any minds, but because it gives us an opportunity to refocus attention on the thing that the American people sent me to focus on.”

Debt Limit

The president and lawmakers confront a daunting list of decisions affecting the economy when lawmakers return from their August recess. One of the most critical is raising the government’s debt ceiling of $16.7 trillion, allowing it to pay bills already incurred.

While a shrinking federal deficit has eased pressure, the limit will be hit sometime between October and December and the government will be in default unless it’s raised.

Automatic, across-the-board budget cuts of $109 billion loom with the new government fiscal year, which begins Oct. 1, after $85 billion in cuts that took effect in March. The White House wants to end automatic cuts; the Republican-controlled House has shown little inclination to take up a compromise to avoid them. The forced spending cuts, known as sequestration, have been a drag on growth.

Bernanke’s Caution

Federal Reserve Chairman Ben S. Bernanke told a congressional panel last week that even as some threats to the economy have diminished since late last year, “the risks remain that tight federal fiscal policy will restrain economic growth over the next few quarters by more than we currently expect.”

Bernanke also said a prolonged debate over the debt ceiling could hamper the recovery.

Obama plans to highlight how far the economy has come since the depths of the 18-month recession that ended in June 2009. American employers added an average of 196,000 jobs in each of the last three months, topping economists’ forecasts, and the unemployment rate has eased to 7.6 percent.

The Standard & Poor’s 500 Index (SPX) advanced to a record yesterday, up 0.2 percent at 4 p.m. in New York to 1,695.53 and bringing this year’s gains to 19 percent.

“We’ve created over 7.2 million private-sector jobs; 40 straight months of economic growth,” White House press secretary Jay Carney said yesterday. “But we have more work to do.”

Republican Response

Republican critics scoffed at Obama’s rhetorical offensive more of the same. Aides to Senate Minority Leader Mitch McConnell of Kentucky sent out an e-mail with the subject line “Didn’t he just do this a couple months ago?” that listed more than a dozen efforts by the president to focus on the economy since he took office in January 2009.

Obama made his comments last night at an event put on by Organizing for Action, the group organized by former campaign staffers to support his second-term agenda.

The event served as a prelude to what OFA has named “Action August,” when the group intends to escalate pressure on lawmakers to pass gun control, immigration, and climate-related legislation -- all top domestic priorities for Obama.

Tomorrow’s speech marks a return for Obama to Knox College in Galesburg, where he gave a June 4, 2005 address as a U.S. senator for that state that stressed the importance of education and equal opportunity to a thriving economy.

When he delivered the earlier address, the unemployment rate nationally was 5 percent.

Obama also plans to make his argument for increased infrastructure spending and universal pre-kindergarten programs in stop tomorrow at the University of Central Missouri in Warrensburg. The next day, he’ll make a similar pitch in Jacksonville, Florida.

Carney and other administration officials declined to detail Obama’s future speech plans.

To contact the reporters on this story: Roger Runningen in Washington at rrunningen@bloomberg.net; Lisa Lerer in Washington at llerer@bloomberg.net

To contact the editor responsible for this story: David Ellis at dellis5@bloomberg.net

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