President Barack Obama today challenged European leaders and Congressional Republicans on the economy while also defending administration officials against accusations that they leaked classified national security information to boost his re-election.
Obama delivered what was, at times, a didactic speech on his economic beliefs, alternately espousing Keynesian economics and using his usual political rhetoric five months out from Election Day. The president yet again called on Congressional Republicans to approve the jobs legislation he proposed late last summer.
In particular, he singled out the need to help states prevent layoffs of government workers and to boost the struggling construction industry. He argued that 450,000 Americans have been laid off from local governments and said 1 million construction workers are out of work. He did note that Congress’ extension of the payroll tax cut has been beneficial but not as stimulative as the full package would have been.
“There’s no excuse for not passing these ideas. We know they can work,” Obama said, asserting that the economy would be on track to add 1 million more jobs this year had the package already been approved.
“If Republicans want to be helpful ... what they should be thinking about is, how do we help state and local governments, how do we help the construction industry,” Obama added. He said their push to further cut spending would only “result in further layoffs ... [and] result in lower growth and fewer jobs, not more.”
Despite his nod toward the construction industry’s struggles, he did not directly mention the stalled highway bill, which many lawmakers say could help boost that sector by authorizing new road and other transportation projects.
On the overall budget crisis — and in a subtle acknowledgement that Congress must act to approve expiring tax cuts, potentially deal with a sequester and yet again extend the nation’s borrowing limit — Obama said: “There’s nothing fiscally responsible about waiting to fix your roof until it caves in.”
But what made this address markedly different from the many others Obama has given on the economy and his frustration with what he believes to be an obstinate GOP, was the president’s focus on Europe.
He was especially strong in addressing Greece, one of the most debt-saddled and economically unstable countries in the eurozone, just days before the country’s June 17 legislative elections.
“We’ve said that it is everybody’s interest for Greece to remain in the eurozone while respecting its commitments to reform,” Obama said from the podium. He warned Greeks that their “hardships likely will be worse if they choose to exit from the eurozone.”
Obama also expressed concern over how the austerity measures being embraced by many European nations now might affect short-term gross domestic product growth and how that could hamper long-term economic and employment growth.
He said that his administration has tried to embrace a short-term spending approach paired with long-term reforms for the American government and has advised European leaders to do the same.
“If you are engaging in too much austerity too quickly and that unemployment rate goes up ... then that actually makes it harder to then pay off your debts,” Obama said. “And the markets, by the way, respond when they see this sort of downward spiral happening, they make a calculation ... to charge more.”