Skip to main contentSkip to navigationSkip to navigation
Barack Obama
Barack Obama's comment that 'the private sector is doing fine' led to a swift backlash from Mitt Romney and the Republicans. Photograph: Brendan Smialowski/AFP/Getty Images
Barack Obama's comment that 'the private sector is doing fine' led to a swift backlash from Mitt Romney and the Republicans. Photograph: Brendan Smialowski/AFP/Getty Images

Barack Obama seeks to clarify remarks on private sector

This article is more than 11 years old
Republican presidential candidate Mitt Romney pounces on statement to attack president for being 'out of touch'

Barack Obama declared on Friday 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 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% in May as job creation had slowed, and new signs that the European debt crisis was hurting the US economy.

The furore over Obama's remarks on the private sector overshadowed his wider message at a White House news conference. 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. "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 4.3m 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."

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 3.1m 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% 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 4.3m 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 manoeuvring to come up with their figure of 4.3m 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.

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

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

Most viewed

Most viewed