Economic gains may not help Democrats much in 2014

TOM RAUM, Associated Press

WASHINGTON (AP) -- Presidents like to take credit for economic recoveries, just as President Barack Obama is angling to do now.

He and his allies in Congress have "walked the economy back from the brink," his new 2014 federal budget blueprint asserts. And Democrats hope these improvements, while still slow and uneven, will give them at least a small boost in 2014's midterm races.

That's a big order, considering:

• Presidential claims of responsibility for economic gains rarely win plaudits from voters, yet presidents nearly always get blamed when things get worse.

• The historical odds for midterm gains in Congress by the in-power party are slim at best. Since World War II, the president's party has lost an average of 26 seats in midterm elections and gained seats only twice -- Democrats in 1998 under President Bill Clinton and Republicans in 2002 with George W. Bush in the Oval Office.

• Presidential elections are often referendums on the economy. That applies less often to midterms.

Still, the health of the economy "is going to be an important factor" in 2014 races, said Democratic pollster and strategist Mark Mellman. "What matters most is changes in the amount of money people have in their pockets. It's very hard to tell people they're better off than they feel."

"But we're still quite a ways from November 2014," he added.

Right now, surveys and reports show that the recovery is continuing, although more slowly than most, despite continued high unemployment and an environment of modest economic growth and inflation. Home prices are on the rise, manufacturing is slowly improving.

And in a report Monday, the government said consumers increased their spending in each of the last three months: by 0.2 percent in March, 0.7 percent in February and 0.3 percent in January.

The government reported Friday that economic growth accelerated to an annual rate of 2.5 percent from January through March, helped by the strongest consumer spending in more than two years. But federal spending fell, and tax increases and Washington's budget cuts could slow growth later this year.

The report showed the economy was getting stronger after nearly stalling late last year, when it grew just 0.4 percent in the final three months of 2012.

"It's hard to do victory laps in the climate of slow growth and continued high unemployment," said historian Douglas Brinkley of Rice University.

"A president's job is to rebuild the psyche of the nation," Brinkley said. "And there has been a feeling of incremental improvement after Obama's first term in office. That's the key word, incremental. Presidents have to make the people believe that things are getting better every month.

"A lot of what I'm talking about is the optics of the situation. When Obama came in, things were rotten and then it got better. There is no longer that sense of panic going on."

Obama's efforts have been overshadowed somewhat by several noneconomic issues: the congressional battles over gun safety and immigration and the deadly Boston Marathon bombings.

What steps can Obama rightfully claim that have helped spur economic improvement?

His $830 billion stimulus program of 2009, for one. The White House also cites two other major emergency programs -- the auto and financial industry bailouts. Both were started under President George W. Bush and expanded by Obama.

The White House suggests Obama's anti-recessionary programs helped nurture the creation of more than 6 million new jobs since the economy bottomed in 2010. Republicans voice skepticism but mainstream economists generally cite substantial gains from the federal efforts in the range of 3 million or more jobs.

The bank bailout, or Troubled Asset Relief Program, turned out to be politically radioactive for many who supported it. But economists generally agree it helped avert a national financial meltdown. And it wound up yielding investment returns to taxpayers of most of the original $700 billion-plus cost.

Obama can't claim credit for some of the biggest contributors to walking the economy back from the brink: actions by the semi-autonomous Federal Reserve, under Chairman Ben Bernanke, to hold down interest rates and lubricate the financial system by injecting around $3 trillion in newly printed money over the past five years.

While the Fed's program could still ignite inflation, so far it has helped encourage business and consumer spending and housing purchases and has helped lift stocks, with the Dow industrials roughly doubling since Obama took office.

Trying to take credit for economic gains can backfire on a president, analysts in both parties agree.

Democratic strategists James Carville, Stan Greenberg and Erica Seifert concluded from focus-group sessions with both Democratic and Republican audiences that Obama fares far better in speeches when he highlights economic progress without taking credit.

People "are very much on edge financially ... because they live it every day. Every speech needs to start from a place that understands this is not theoretical or ideological," they wrote in a policy memo. Obama must "thread a very careful needle," they concluded.

Republican consultant Rich Galen said presidents in general -- and Obama in particular -- tend to take disproportionate responsibility for economic advances. "Although we know from the data that the economy is creaking ahead, it certainly isn't booming -- with so many people who continue to be out of work. Everybody knows somebody who doesn't have a job," Galen said.

Americans don't like it when presidents pound their own chests rhetorically or talk up their accomplishments, says Ross Baker, a political science professor at Rutgers University. "Americans would say, 'Well, that's our judgment to make, whether you're doing a good job or not.'"

"Facts speak for themselves," Baker said. "If things are good, you don't really need to make any extraordinary claims. Nobody notices a sunny day. But when it rains, you've got to get an umbrella, put on a raincoat. Psychologically, it's a very different kind of situation."

Obama also believes his major health insurance overhaul, now known by opponents and supporters alike as "Obamacare," will keep down health care costs in the years ahead. Republicans disagree.

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