Obama seeks to clarify remarks on private sector

WASHINGTON (AP) — President Barack Obama declared that "the private sector is doing fine," drawing instant criticism from Republicans who said it showed a lack of understanding of the nation's economic woes. Republican presidential candidate Mitt Romney responded, "Is he really that out of touch?"

Reacting to the Republican attack, the president later Friday sought to clarify his remarks, saying that it was "absolutely clear that the economy is not doing fine." He said that while there had been some "good momentum" in the private sector, public sector growth lagged behind, making it imperative that Congress act on his proposals to boost state and local government jobs.

It was the latest episode in a week of difficult turns for Obama's re-election prospects, including last Friday's report that the unemployment rate had risen slightly to 8.2 percent in May as job creation had slowed, and new signs that the European debt crisis was hurting the U.S. economy.

The furor over Obama's remarks on the private sector overshadowed his wider message at a White House news conference Friday morning. Accusing Republicans of pursuing policies that would weaken the economy, Obama urged passage of legislation that he said would create jobs, and that Republicans have long blocked.

The president said that if Congress had passed his jobs bill from last year, "we'd be on track to have a million more Americans working this year, the unemployment rate would be lower, our economy would be stronger."

"Of course Congress refused to pass this jobs plan in full," he said dismissively. "They left most of the jobs plan just sitting there, and in light of the headwinds we are facing right now I urge them to reconsider because there are steps we can take right now."

The president said businesses had created 4.3 million jobs during the past 27 months.

"The private sector is doing fine," Obama said. Economic weakness is coming from state and local government, with job cuts initiated by "governors or mayors who are not getting the kind of help that they have in the past from the federal government and who don't have the same kind of flexibility as the federal government in dealing with fewer revenues coming in."

Republicans pounced.

Romney, holding a campaign event in Iowa, said Obama's remark was "defining what it means to be detached and out of touch with the American people." He said the comment "is going to go down in history as an extraordinary miscalculation and misunderstanding."

But while "doing fine" is in the eye of the beholder, Obama was correct that the job picture in the private sector is brighter than in the public sector. Since the recession officially ended in June 2009, private companies have added 3.1 million jobs. Largely because of cuts at the state and local level, governments have slashed 601,000 jobs over the same period. According to the government, corporate profits have risen 58 percent since mid-2009.

Even so, by historical standards, private job gains in the last three months have been weak after such a deep recession.

Obama pressed Congress to enact parts of his jobs agenda, including proposals to help state governments rehire teachers, police officers and firefighters.

"I cannot give you a good reason why Congress would not act on these items other than politics," Obama said after being asked to respond to the Republican criticism.

Yet his comments about the strength of private sector hiring were bound to be replayed in television ads meant to discredit his message on the economy, the top issue for voters.

Seconds after Obama made the remark, Republicans circulated the quote on Twitter and Romney seized on it about an hour later after meeting farmers.

Behind the scenes, Romney aides worked furiously to push what they hope could be a shift in the campaign. Many remember four years ago, when Republican nominee John McCain asserted that "the fundamentals of our economy are strong" in the midst of a meltdown. Obama's team went after McCain then and voters were left wondering what the Republican was thinking.

Obama campaign spokesman Ben LaBolt said Obama had taken office "in the midst of a severe economic crisis and fought back against that to the point where businesses have now created more than 4.3 million private sector jobs. The president has always been clear that we need to do more than recover from the recession."

Obama and his campaign did some maneuvering to come up with their figure of 4.3 million new private jobs. They counted from the low point for the private sector, in February 2010, ignoring huge job losses in the first year of his presidency. Counting from the end of the recession, private-sector job growth was considerably smaller.

The president's re-election campaign has been in a rough patch lately. A bleak jobs report last week showed the economy added just 69,000 jobs in May, which can't help Obama's prospects in a race expected to hinge largely on the economy.

Adding to a difficult week for Obama and his fellow Democrats, Wisconsin's Republican Gov. Scott Walker turned back a recall movement led by organized labor Tuesday, and Romney overtook Obama in May fundraising.

Romney's campaign and the Republican National Committee said Thursday they had raised more than $76 million combined in May, surpassing the $60 million haul by the Obama campaign and the Democratic National Committee.