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Obama forced to defend remarks; Statement on economy attacked by Romney

President Obama on Friday sought to deploy the game-changing powers of his office against a grim political week during which the economy, the polls and even some of his Democratic allies seemed to conspire against him.

But the bully pulpit failed him.

Laying out his economic argument at a morning news conference, Obama said that cutbacks in state and local government spending have slowed the nation's recovery and that Congress has "no excuse" for not supporting his jobs bill that would provide funding to retain public workers.

"The private sector," the president added as a point of comparison, "is doing fine."

Republican adversaries pounced on the assertion to accuse Obama of being out of touch, in the wake of a government report last week showing the economy had created only 69,000 jobs in May and that the unemployment rate had risen to 8.2 percent.

At a campaign appearance in Council Bluffs, Iowa, GOP presidential rival Mitt Romney accused Obama of an "extraordinary miscalculation" that will "go down in history."

"Is he really that out of touch?" Romney said. "He's defining what it means to be detached and out of touch with the American people."

Obama aides scrambled to contain the fallout, complaining that Republicans had intentionally mischaracterized the president's remarks.

But by midafternoon, Obama felt compelled to clarify his position.

"It's absolutely clear the economy is not doing fine," he told reporters from the Oval Office after meeting with Philippine President Benigno Aquino. "The economy needs to be strengthened. I believe that there are a lot of Americans who are hurting right now, which is what I've been saying since I came into office. And the question then is, what are we going to do about it?"

The episode reinforced the impression that the White House and the Obama campaign were struggling to regain their footing after a difficult week.

Over the course of seven days, Obama endured the Labor Department's dismal May jobs report, Republican Wisconsin Gov. Scott Walker's victory in a recall election against an Obama-endorsed challenger, and former President Bill Clinton arguing in favor of temporarily extending the George W. Bush-era tax cuts for the wealthy, which Obama opposes.

In addition, the Romney campaign for the first time raised more money, reporting a $77 million haul in May compared with the Obama campaign's $60 million.

The president's setbacks have coincided with a tightening of the polls in the presidential race as Romney has closed the gap with the president at a faster clip than even some GOP political analysts had envisioned.

Perhaps more than Romney, however, it is the relentless nature of the European debt crisis that poses the biggest threat to the Obama campaign. The crisis threatens to further curtail U.S. growth with dire consequences for the economy, but solutions remain well out of the president's control.

The president's worry over Europe was evident Friday, when he opened his news conference by renewing calls on euro-zone leaders to strengthen their currency through a combination of growth initiatives and financial austerity measures.

Later in the day, Obama called French President Francois Hollande, whose push for new spending to help stimulate growth dovetails with Obama's message in the United States. Obama and Hollande discussed their strategy ahead of the Group of 20 economic summit in Mexico in two weeks.

But the president offered no new economic proposals for growth at home. Instead, he urged Congress to reconsider its opposition to the American Jobs Act that his administration rolled out in the fall.

Although lawmakers did approve some of that bill's provisions, including an extension to the payroll tax cut and long-term unemployment insurance, major initiatives aimed at giving states money to retain teachers, firefighters and police officers were blocked by Republicans.

During his remarks, Obama noted that the economy had added 4.3 million jobs over the past 27 months, but he stressed that public sector employment has lagged because of deep cuts to state and municipal budgets.

In Iowa, Romney ridiculed Obama's call for "another stimulus" to hire more government workers. He cited the results of the Wisconsin recall election as evidence that the public was fed up with big government.

"[Obama] says we need more firemen, more policemen, more teachers. Did he not get the message of Wisconsin?" Romney said. "The American people did. It's time for us to cut back on government."

Mark Zandi, chief economist for Moody's Analytics, said Obama was accurate in saying the private sector, which is growing at a rate of 3 percent, has outpaced the public sector.

But he added that while the private sector pace would be OK in a healthy economy, it is "not anything anyone will feel comfortable with given the 8.2 percent unemployment rate. That's not fine."