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Obama Dials Back Optimism After Romney Jumps on Comments

President Barack Obama sought to contain political damage by clarifying optimistic comments about the state of the U.S. private sector, saying it is “absolutely clear that the economy is not doing fine.”

His remarks came after Mitt Romney and other Republicans seized on comments the president made at a White House news conference that they said showed Obama doesn’t understand the state of the U.S. economy.

“The truth of the matter is that, as I said, we’ve created 4.3 million jobs over the last 27 months, over 800,000 just this year alone,” Obama said at a White House news conference. “The private sector is doing fine.”

Romney, the presumptive Republican presidential nominee, told Iowa voters that Obama is “defining what it means to be detached and out of touch with the American people.” House Majority Leader Eric Cantor of Virginia said at a news conference, “My question would be to the president, ’Are you kidding?”’

The Republican National Committee rushed out a Web ad that featured a video clip of Obama saying “the private sector’s doing fine” followed by text posing the question, “How can President Obama fix our economy if he doesn’t understand what’s broken?”

The campaign conflict caps a week of economic and political developments that have placed the administration on the defensive. These include the rise of the nation’s unemployment rate to 8.2 percent in May and the failure of Democrats and organized labor in a recall campaign against Republican Governor Scott Walker in Wisconsin, a state Obama’s campaign is counting on for his re-election.

Recalling 2008

The back-and-forth recalled a key moment in the 2008 campaign. The Republican nominee, Arizona Senator John McCain said “the fundamentals of our economy are strong” on Sept. 15 following the bankruptcy filing of Lehman Brothers Holdings Inc. amid the financial crisis. At the time, Obama’s campaign derided McCain as “out of touch.”

“I’m sure Democratic speechwriters, their stomachs were turning,” independent political analyst Stu Rothenberg said.

Steve Elmendorf, a Democratic strategist who served as a deputy campaign manager for Democrat John Kerry’s 2004 presidential campaign, said while Republicans would try to get mileage out of the comment, Obama’s analysis was accurate.

“Look, the economy’s doing better than when he started out being president,” Elmendorf said. “He made it pretty clear he’s not satisfied with where things are and things need to improve.”

Republican Opening

Republicans saw an opening.

“I think it’s a pretty devastating mistake,” said Rob Stutzman, a Sacramento, California-based Republican political consultant. He compared it with McCain’s 2008 remarks, which were widely seen as a significant blow to his election chances.

“This is the day that he really lost his grip on his re-election,” Stutzman said of Obama.

“As John McCain learned, you can’t put toothpaste back in the tube,” said Dan Schnur, a former McCain aide who is now the director of the Jesse M. Unruh Institute of Politics at the University of Southern California. It may not matter in the long-term, he said.

“But in the short term it’s not an ideal way to end up a less than ideal week,” Schnur said.

Matter of Timing

Robert Dallek, a retired professor of presidential history at Boston University, said the timing may matter more than the actual remarks.

“At this point in the election cycle people are paying very, very little attention,” he said. “There will be so many other things on the front page and something will come along tomorrow that will just push this to farthest reaches of people minds.”

Romney used Obama’s statement to reinforce his line of attack against the president.

“Is he really that out of touch? I think he’s defining what it means to be detached and out of touch with the American people,” Romney said at a campaign event outside at a park in Council Bluffs, Iowa. “Has there ever been an American president who is so far from reality?”

Following Romney’s jab, Obama told reporters gathered in the Oval Office where he held an afternoon meeting with Philippine President Benigno Aquino, “Listen, it is absolutely clear that the economy is not doing fine. That’s the reason I had the press conference.”

‘Good Momentum’

While there has been “some good momentum” in the private sector, “there are too many people out of work, the housing market is still weak and too many homes underwater.

“That’s precisely why I asked Congress to start taking some steps that can make a difference.”

Obama’s re-election prospects suffered a blow June 1 after the government reported that hiring slowed last month, reinforcing Romney’s criticism of him.

Jobs in the U.S. grew by 69,000 in May, the fewest in a year and less than the most pessimistic forecast in a Bloomberg News survey of private economists. The unemployment rate increased to 8.2 percent, the first rise since last June.

Romney also questioned Obama’s calls for additional federal spending to boost job growth.

“He wants another stimulus. He wants to hire more government workers,” Romney said. “Did he not get the message of Wisconsin?” he said, referring to Republican Governor Scott Walker’s June 5 victory in a recall election spurred by his push to restrict bargaining rights for public-employee unions. “The American people did.”

Economic Proposals

Obama said Romney and Republicans in Congress haven’t offered proposals to spur growth.

“What I’m interested in hearing from Congress and Mr. Romney is, what steps are they willing to take right now that are going to make an actual difference?” Obama said after the meeting with the president of the Philippines.

Obama’s campaign accused Romney of trying to “talk down” the U.S. economy.

“Iowans got today what they’ve come to expect from Mitt Romney: angry, dishonest rhetoric about President Obama and zero new solutions to grow the economy and strengthen the middle class,” Obama re-election spokeswoman Lis Smith said in a statement.

Romney was last in Iowa less than a month ago, on May 16, and its place on his schedule signals his interest in trying to take the state from Obama’s column in the 2012 election.

An NBC News-Marist poll released May 31 showed Obama and Romney tied in Iowa, each with support from 44 percent of registered voters, figures that include those who are undecided yet leaning toward one of the candidates. Eliminating the leaners, 10 percent of voters in the state are undecided, the poll showed.

The campaign for Iowa’s electoral votes will play out in a state with a better economic environment than the national picture. The state’s jobless rate in April was 5.1 percent, below the current national average of 8.2 percent and down from 6.3 percent in November 2010.

After his Iowa stop, Romney was scheduled to appear in Salt Lake City with Republican Senator Orrin Hatch of Utah, who faces a primary race on June 26, and attend a fundraiser there. He is taking the weekend off from the campaign trail.

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