Obama gets grief for saying private sector 'fine'

WASHINGTON (AP) ? President Barack Obama made Mitt Romney's day by declaring "the private sector is doing fine" and opening himself to the accusation that he ? not the rich Republican ? is the one who is out of touch with reality. Obama quickly clarified his remark Friday but Republicans already had their teeth in it and weren't letting go.

"Is he really that out of touch?" GOP presidential candidate Mitt Romney asked as Obama's initial comments ricocheted through the presidential campaign.

Seeking to head off any damage, Obama backpedaled and declared it is "absolutely clear that the economy is not doing fine." While there had been some "good momentum" in the private sector, Obama said, public sector growth lagged behind, making it imperative that Congress act on his proposals to hire more teachers and first-responders.

Obama's original six-word sentence, even if taken out of context, amounted to an unforced political error. The economy is the single biggest issue on voters' minds and a weak spot for him, given the nation's stubbornly high 8.2 percent unemployment rate.

Nearly every day, Obama finds himself having to defend his stewardship of an economy that has struggled to recover from the 2008 economic downturn and pleading with voters to stick with him because, he says, Romney would pursue policies that led to the recession.

But on Friday, Obama may have given his rival an opening. The former Massachusetts governor argued anew that Obama does not understand how to jumpstart the economy and his agenda has thwarted the recovery instead of putting millions of unemployed workers back on the job.

Obama's comments at a White House news conference were reminiscent of Republican nominee John McCain's assertion in mid-September 2008 that the "fundamentals of our economy are strong," just as the U.S. economy was melting down. Candidate Obama seized on those comments then. Now, as president, he was getting grief along similar lines.

Romney, holding a campaign event in Council Bluffs, 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.

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. The Republican National Committee posted an online video by midday repeating Obama's comment and asking: "How can President Obama fix our economy if he doesn't understand what's broken?"

The question was a direct rehash of the one Obama's campaign asked voters in a very similar video four years ago.

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." He later said on Twitter, "Being called out of touch by a candidate who joked about being unemployed and said he likes to fire people is rich."

Obama and his campaign did some cherry-picking 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 the considerably smaller 3.1 million.

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 and the unemployment rate ticked up slightly.

"Are you kidding?" asked House Majority Leader Eric Cantor, R-Va. "Did he see the job numbers that came out last week? The private sector is not doing fine."

Louisiana Gov. Bobby Jindal, a potential Romney running mate, took his turn addressing conservatives assembled in Chicago to mock Obama.

"The private sector is so foreign to him he might need a passport to go visit," Jindal said. "He might need a translator to talk to people in the private sector."

The episode also followed Republican Gov. Scott Walker's victory in a Democratic-led, union-backed recall effort in Wisconsin, and Romney's lead over 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.

Later in the day, Obama's campaign tried to seize on what it saw as Romney's misstep when the former governor said in Iowa that Obama "says we need more firemen, more policemen, more teachers. Did he not get the message of Wisconsin? The American people did. It's time for us to cut back on government and help the American people." Obama's campaign equated it with Romney calling for further job loss.

During the news conference, Obama pointed to Republicans in Congress for holding up portions of his jobs bill, which he said could have led to 1 million more jobs this year if it had been passed in full.

"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."

He said that if Republicans really want to put people back to work, "what they should be thinking about is how do we help state and local governments and how do we help the construction industry."

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Elliott reported from Council Bluffs, Iowa. Associated Press writers Paul Wiseman, Christopher S. Rugaber and Tom Raum in Washington and Brian Bakst in Chicago contributed to this report.

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