White House says economy is sound despite 'mess'

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(Agencies)
Updated: 2009-03-16 08:29

"There's a reason why even in the midst of this economic crisis you've seen actual increases in investment flows here into the United States," Obama said Saturday in the Oval Office. "I think it's a recognition that the stability not only of our economic system, but also our political system, is extraordinary."

The seesaw message from the new administration drew sharp criticism from Senate Republican leader Mitch McConnell, who said Obama's team was exploiting the economic situation for political gain.

"They're taking advantage of a crisis in order to do things that had nothing to do with getting us into the crisis in the first place," McConnell said.

Democratic lawmakers promoted a potential plan to help move so-called toxic assets off bank ledgers. Rep. Barney Frank, D-Mass., said discussions were under way, but would not be rushed.

"If they wait a week or two more, no one ought to get all in a twitter about that. It's very important to do it right," he said.

Also Sunday, the president's team largely rejected suggestions that officials were considering taxing employees' health benefits. As a candidate Obama had called such a proposal a "multitrillion-dollar tax hike."

"I'm not leaving the door open," said Austan Goolsbee, a senior White House economist with a broad portfolio and a personal friendship with Obama, responding to a report in Sunday's New York Times. "The president has laid out a series of clear principles on the health plan that we will do whatever it takes to get affordable quality coverage to all Americans."

Romer said she wouldn't take the idea off the table, but she added that Obama hasn't supported it. Larry Summers, the president's chief economic adviser, said it wasn't part of Obama's principles but left open the possibility of such a move from Congress, where Democrats control both chambers.

Even so, Obama's political allies are not taking chances. Organizing for America, whose almost 14 million-person e-mail list is drawn from voters who supported Obama last November, plans to mobilize them this week to build grass-roots support for the budget on the Internet and on phone lines.

"We didn't fight to shy away from the tough long-term decisions Washington has ducked for far too long," Obama political adviser David Plouffe wrote this weekend to members of the group, which is overseen by the Democratic National Committee.

Republicans refused to accept Democrats' plans. McConnell said the GOP would work to amend the proposal in the Senate, but not put forward a wholesale plan.

Rep. Eric Cantor, the GOP's No. 2 leader in the House, promised an alternative budget, in part to counter Democratic attacks that his party provided only "no" but not other ideas and in part to help small businesses, whom Cantor said Obama ignores.

In contrast to Cantor's charge, Obama planned to provide billions of dollars in federal lending aid aimed at struggling small business owners.

The broad package of measures to be announced Monday includes $730 million from the stimulus plan that will immediately reduce small-business lending fees and increase the government guarantee on some Small Business Administration loans to 90 percent, according to officials briefed on the plan who demanded anonymity because the announcement had not been made.

McConnell appeared on ABC's "This Week." Summers appeared on ABC and on CBS's "Face the Nation." Romer and Cantor appeared on NBC. Goolsbee and Frank appeared on "Fox News Sunday."

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