President Barack Obama told supporters at a hometown fundraiser last night that the debt ceiling debate in Washington “sets the stage” for the 2012 election.
“This episode was just a severe example of what has been going on for quite some time, and it’s part of what led me to run for president,” he told about 100 donors at a dinner on the eve of his 50th birthday at a Chicago concert hall. The events of the past two weeks, he said, illustrate “not only how tough it’s going to be, but exactly what’s at stake.”
He addressed the dinner guests and approximately 2,400 other contributors at a separate event earlier one day after he signed a measure raising the federal debt ceiling and trimming the nation’s long-term deficit. Obama sought to persuade his backers that his strategy in the budget fight is the right one.
“We have made a legitimate down payment on deficit reduction in a way that’s actually responsible, that is not going to dismantle the social safety net,” Obama said. Republicans, he said, are “single-minded in their focus” to shrink government by cutting federal spending.
Obama called the last two weeks in Washington leading up to the Aug. 2 final passage of the debt-ceiling bill “extraordinary.” He added, “It’s not the kind of extraordinary the American people are looking for.”
Some Democratic Party activists are expressing disappointment in the deal Obama struck with Republicans to avert a government default on its obligations. That may complicate Obama’s attempts to recreate the enthusiasm supporters brought to his 2008 campaign.
“Liberals are disgruntled. I can see them playing a little harder to get when it comes to writing checks,” said Stuart Rothenberg, editor of the Washington-based Rothenberg Political Report. “He’s going to raise the same amount of money that he would have anyway. It will just be a more uncomfortable process for Obama fundraisers.”
The drawn-out stalemate over how to trim the deficit by as much as $2.4 trillion over 10 years also forced Obama to cancel 10 planned fundraisers while he stayed in Washington.
Still, Obama raised more than $86 million in the quarter ending June 30, eclipsing the combined haul of the 2012 Republican field.
Impact of Economy
Obama also is putting renewed emphasis on economic growth at campaign and official events. At the dinner for high-dollar donors following his concert hall remarks, Obama said the bruising battle over the debt ceiling and deficit reduction was “part of what led me to run for president.”
The jobless rate will remain at 9.2 percent in July when the Labor Department releases the figure tomorrow, according to the median estimate of economists in a Bloomberg survey. The administration and private economists forecast the rate will be above 8 percent on Election Day in 2012.
Obama told the larger audience that he ran for the White House in 2008 to make sure the economy wasn’t “just for those at the very top but that we have broad-based and shared prosperity, from the machinist on the line to the CEO in the boardroom.”
Obama’s re-election chances hinge on job creation, said Rothenberg.
“If jobs aren’t coming back and if the economy looks weaker not stronger, there’s nothing to sell,” Rothenberg said. “If we didn’t see a dramatic increase in jobs but the American public felt optimistic, that would be good enough. The problem is, there’s a direct relationship between the public mood and the shape of the economy and prospects of the economy.”
The Standard & Poor’s 500 Index S&P 500 fell 2.6 percent to 1,227.34 at 1:12 p.m. in New York, a 10 percent drop from its April 29 peak and weakest level in nine months, while two-year Treasury yields plunged to a record low amid concern the economy is weakening.
Yields on 10-year notes dropped 12 basis points, or 0.12 percentage point, to 2.50 percent at 12:21 p.m. in New York, according to Bloomberg Bond Trader prices. U.S. 30-year bond yields dropped 12 basis points to 3.78 percent and two-year note yields fell five basis points to 0.28 percent, after touching a record low 0.2645 percent.
Republican National Committee Chairman Reince Priebus cited Obama’s fundraising to criticize the president’s performance.
“The fundraiser in chief is back in Chicago doing the thing that he’s really good at and that’s raising money to save his job,” Priebus said in a statement. “This president, while he’s in love with the sound of his own voice, he’s not in love with following through on his promises.”
The festivities featured performances by Chicago natives, singer Jennifer Hudson and jazz pianist Herbie Hancock, and were held at the Aragon Entertainment Center, a Spanish-style concert hall on the city’s North Side that can accommodate up to 4,500 people. Ticket prices ranged from $50 to the legal maximum limit of $35,800.
The money will go to the Obama Victory Fund 2012, a joint Obama campaign and Democratic National Committee fund, according to an Obama campaign official. Obama’s campaign can accept $5,000 of each $35,800 contribution.
Obama’s adopted home has been a steady source of political and financial support. In the 2008 campaign, Illinois was second only to California for the total number of Obama “bundlers,” the teams of people who solicit money from wide circles of donors, according to the Washington-based Center for Responsive Politics. There were 97 from California, 86 from Illinois and 82 from New York.
The campaign was also test-driving a new media strategy: For the first time the president used technology created by Adobe Systems Inc., a computer software product and technology development company, to speak with supporters at more than 1,100 organizing meetings across the country simultaneously.