GOP Targets Obama's 'Recovery Summer' Amid Economic Gloom

Obama and Democrats promised a summer of economic growth; instead it's stagnant.

August 23, 2010, 4:21 PM

WASHINGTON, Aug. 24, 2010— -- After months of withering job losses and weak economic growth, summer was going to be the season of recovery, the Obama administration heralded in June.

Thousands of infrastructure and construction projects funded by the American Recovery and Reinvestment Act were to come on-line during June, July and August, helping to "create jobs for American workers and economic growth for businesses, large and small."

The White House dubbed it "Recovery Summer" and President Obama declared the economy had begun "growing at a good clip." Vice President Joe Biden predicted weeks earlier that creation of 250,000 to 500,000 new jobs a month could soon be on the horizon.

But with summer quickly coming to an end, those jobs gains and a robust economic recovery have not yet materialized, leaving Democrats on the verge of a fall election campaign in which Republicans are poised to make them eat their words.

"Sadly, this so-called 'Recovery Summer' could end up with more Americans finding themselves out of work then when it began," said National Republican Congressional Committee spokesman Ken Spain. "Expect Republican candidates across the country to ask one simple question of Democrat incumbents: 'Where are the jobs?'"

Private companies only added 153,000 jobs in May, June and July combined, according to the Labor Department. If you count government jobs and the shedding of special Census hires, the net gains were only 80,000 over the period. The economy would need to add 8 million jobs to reach pre-recession levels.

Most economists agree the $787 billion Recovery Act has helped prevent the recession from being significantly worse, boosting the gross domestic product and stemming job losses. But many say its effect has largely begun to wear off.

"One ironic thing about 'recovery summer' is that this is the first quarter that the impact of the Recovery Act is going to be very small," said Josh Bivens, an economist at the nonpartisan Economic Policy Institute.

Two thirds of all stimulus dollars will have been spent by the end of the summer, Bivens said. The economy grew 3.7 percent in the first quarter of 2010 but slowed to 2.4 percent in the second quarter.

Economic growth is "going to drop rapidly for the rest of this year and the Recovery Act is going to add zero. It will have run out," Bivens said.

Still, the Obama administration believes the economic rescue package has turned the economy around and put it on the right path for the future.

"The combined effect of government actions taken over the past two years -- the stimulus package, the stress tests and recapitalization of the banks, the restructuring of the American car industry and the many steps taken by the Federal Reserve -- were extremely effective in stopping the freefall and restarting the economy," wrote Treasury Secretary Timothy Geithner earlier this month in a New York Times op-ed entitled "Welcome to the Recovery."

"We're not going to get all 8 million jobs that were lost back overnight. It's going to take some time," President Obama said last week in Ohio. "And a lot of it's sort of like recovering from an illness. You get a little bit stronger each day and you take a few more steps each day."

Democrats are hoping those little steps forward will be enough to convince voters in November that the Democrats' economic policies are working and that things could have been worse without them.

Republicans "are counting on the fact that the American people are somehow going to have a bout of collective amnesia come these elections, because we all know that, George Bush's last day in office, we saw this country losing 700,000 jobs a month," Rep. Chris Van Hollen, chair of the Democratic Congressional Campaign Committee, said last week.

"I think we're going to get a fair amount of credit by November," said Vice President Biden. "I think we're going to do fine." Biden has predicted the Democrats will keep both the House and Senate.

But touting summer 2010 as "the most active Recovery Act season yet" and, implicitly, as a period of job growth, belies a reality many Americans say they are experiencing.

Only 27 percent of Americans see the economy as improving, according to the most recent ABC News/Washington Post poll. And a new low -- 43 percent -- approve of Obama's handling of the economy.

"'Recovery Summer' is their 'mission accomplished' without the banner," said Larry Sabato, director of the University of Virginia's Center for Politics, comparing the Obama administration's message to President George W. Bush's famous declaration of victory in Iraq in May 2003.

Sabato said the effort to infuse optimism about the economy into the electorate could backfire in November.

"The amazing paradox about this election is that the likely winners [Republicans] are more unpopular than the likely losers," he said. "The only reason they could win is because the Americans who are voting… actually understand the system and they realize all they're doing is checking and balancing Obama. They don't trust anyone."

Claiming the economy was advancing when most Americans didn't share that view was precisely the pothole that swallowed George H.W. Bush in his unsuccessful re-election bid in 1992.

"When [President George H.W.] Bush went down in 1992, the economy actually had recovered. The recession ended in the last quarter of 1991. There was a full year of recovery before the election. … there is zero chance that things will improve."

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