Obama: Congress, Europe must stem economic crisis

 

The economy at risk, President Barack Obama accused Republicans on Friday of pursuing policies that would weaken the U.S. recovery, and he simultaneously urged Europe’s leaders to prevent an overseas debt crisis from dragging down the rest of the world.

 

At a White House news conference five months before Election Day, the president also said Republican allegations that his administration has leaked classified information for political gain were offensive. He said his administration has “zero tolerance” for leaks of classified information.

 

As for the economy, Obama urged passage of legislation that he said would create jobs — proposals that Republicans have long blocked.

 

“The recipes that they’re promoting are basically the kinds of policies that would add weakness to the economy, would result in further layoffs, would not provide relief to the housing market and would result … in lower growth,” said the president, who is locked in a close campaign for re-election.

 

His tone was markedly different when it came to European leaders, whom he prodded to inject money into the banking system. He also cautioned Greece that withdrawing from the eurozone would mean even greater economic difficulty than the austerity steps already undertaken.

 

“The solutions to these problems are hard, but there are solutions,” he said.

 

The president spoke after several days of difficult turns for his 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.

 

In the overtly political realm, Wisconsin’s Republican Gov. Scott Walker turned back a recall movement led by organized labor, while former President Bill Clinton stirred controversy by saying Obama should be ready to sign a short-term extension of all expiring tax cuts — including those that apply to the wealthiest taxpayers that the president has vowed not to renew.

 

Obama’s opening remarks were part jawboning and part economics lesson.

 

He stressed the importance of a strong European economy, saying, “If there’s less demand for our products in places like Paris or Madrid it could mean less business for manufacturers in places like Pittsburgh or Milwaukee.”

 

The president said that if Congress had passed the jobs bill he submitted last fall, one million more Americans would be working than are now.

 

“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 U.S. companies actually have been creating jobs at a faster clip than they did after the previous recession while state and local governments have been shedding them.

 

“Where we’re seeing weaknesses in our economy is in the state and local governments, often times cuts initiated by governors or mayor who are not getting the kind of help they got in the past from the federal government,” he said.

 

“If Republicans want to be helpful, if they really want to move forward and put people back to work,” they should enact legislation to permit the hiring of more teachers and law enforcement personnel, he said.

 

The president’s attack was part of his campaign playbook in an election in which the economy is the top issue. Republican rival Mitt Romney is campaigning for the White House as better equipped to created jobs, and polls make the race a close one, with only about a dozen battleground states in dispute.

 

As for leaks of classified information, Obama said his administration has “zero tolerance” for it. Lawmakers are investigating recent leaks of sensitive information about the covert drone and cyberwars against terrorism. Republican Sen. John McCain has accused the Obama White House of leaking the information to bolster the president’s standing on national security grounds.