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Embattled Obama in desperate pursuit of economic makeover

(Xinhua)

15:16, October 28, 2011

NEW YORK, Oct. 27 (Xinhua) -- First it was the jobs bill, now it's the housing and student loan plans. Within only one and a half months, the Obama administration has come up with a series of moves to show the president's resolve to bring the U.S. economy back on its feet, especially with the 2012 presidential election around the corner.

For about three years, the unemployment rate in the United States has been lingering above 9 percent. In some states like California and Nevada, the rate is well above 11 percent this year. This has plunged the national sentiment for the world's largest economy to an unprecedented low since the inauguration of its first African-American president.

It is no wonder that the "Occupy Wall Street" protests -- which started in New York City with but a batch of participants in mid- September -- have struck a chord with tens of thousands of Americans on the blast against corporate greed.

Protesters of all ages and different social backgrounds emerged united and deplored the loss of jobs in the aftermath of the 2008 financial crisis, as the country is still in the shadow of the recession. As the protests grew into a global movement, even President Barack Obama had to sympathize with the "broad-based frustration about how our financial system works."

"We had the biggest financial crisis since the Great Depression -- huge collateral damage throughout the country, all across Main Street," Obama told the media.

Under great domestic pressure amid a grim economy and stubbornly high unemployment rate, the president unveiled on Sept. 8 the jobs bill, introducing measures like payroll tax cuts for employers and employees, tax raises for millionaires as well as new investment in infrastructure projects.

However, in a surprising turn of events, the 447-billion-dollar bill failed to pass the Democrat-controlled Senate on Oct. 11, with those against it saying it was no difference from Obama's previous stimulus plan two years ago, which had failed to turn the economy around.

As some economists assessed that the jobs bill could help create up to 1.9 million job opportunities and help the economy grow by 2 percent, Obama seemed to have resolved to continue pursuing the bill by adopting a piecemeal approach.

"We can't wait for an increasingly dysfunctional Congress to do its job. Where they won't act, I will," said the president. In fact, his new catchphrase -- "We can't wait on Congress: The time to act is now" -- has become a slogan on the White House website.

On Monday, the Obama administration began launching new measures to bypass the uncooperative Congress in an effort to jumpstart the weak economy.

One such initiative was to help distressed homeowners to refinance their loans, a key step toward stabilizing the sagging property sector which Obama cautioned will take more time to recover.

The Federal Housing Finance Administration estimated that an additional one million people would qualify for the new measure, while Moody's Analytics put the figure to as high as 1.6 million.

"The housing market won't be fully healed until the unemployment rate comes down and the inventory of homes on the market comes down," Obama told homeowners in Las Vegas, the state of Nevada, where the sector is hit hardest.

And the president did not stop there: on Wednesday, he put forward a student loan plan to help relieve students of their rising debt.

The plan introduced a "Pay As You Earn" option that will reduce monthly payments for more than 1.6 million people. Starting in 2014, borrowers will be able to reduce their monthly student loan payments from 15 percent to 10 percent.

While the jobs bill is certainly a blow for Obama, there is a silver lining to the president's other attempts at job creation.

Last Friday, Obama signed free trade agreements with the Republic of Korea, Panama and Colombia, in a bid to create thousands of jobs and add 13 billion dollars to U.S. exports every year.

Yet despite his latest efforts, Americans' approval rate for Obama's job at the White House is far from encouraging.

The latest Gallup poll released last Friday showed that last quarter's approval rate dropped to this administration's lowest, at 41 percent. Only one elected president since Dwight D. Eisenhower -- Jimmy Carter -- had a lower 11th-quarter average.

"Americans' satisfaction with the direction of the country remains at historically low levels, and Americans clearly identify the economy and unemployment as the most important problems facing the United States," said the poll.

To make things worse, the International Monetary Fund estimated in September that U.S. GDP growth this year would be at 1.5 percent, well below the projected global average of 4 percent.

Analysts here cited the scenarios of past American presidents, saying few presidents won a second term with an unemployment rate above 9 percent.

The Gallup poll, whose 12th and 13th-quarter average ratings for an incumbent president have strong implications for a second term, also indicated that "a second Obama term likely hinges on whether there are signs of economic progress in the coming months. "

Job creation is certainly a key to bringing the U.S. economy back on track. However, experts noted, remedies for the sluggish economy are equally abound.

J. Bradford Jensen, senior fellow with Washington-based think tank Peterson Institute for International Economics, suggested boosting exports from the fast-growing services sector, which has added in the past decade over 20 percent jobs to the country.

Meanwhile, Pulitzer Prize winner Thomas Friedman prescribed a return to the fundamentals, such as saving and investment, education, infrastructure, immigration, the right rules and government-funded research, to keep the United States internationally competitive.

Whatever move Obama may take to stimulate the economy, one thing is for certain: he needs to throw more punches in the upcoming months, as a Republican presidential candidate is emerging. For him, the race has only just begun. Enditem (Xinhua writers Liu Lina and Zhang Baoping also contributed to the story.)

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