In Context: 'The private sector is doing fine'

Mitt Romney and other Republicans pounced on a line from a June 8, 2012, press conference in which President Barack Obama said "the private sector is doing fine."

Romney, speaking at a campaign event in Council Bluffs, Iowa, shortly after Obama’s press conference, said of Obama’s comment, "He said the private sector is doing fine. He said the private sector is doing fine. Is he really that out of touch? … For the president of the United States to stand up and say the private sector is doing fine is going to go down in history as an extraordinary miscalculation and misunderstanding by a president who’s out of touch."

Here are excerpts of Obama's remarks:

"Keep in mind that the private sector has been hiring at a solid pace over the last 27 months. But one of the biggest weaknesses has been state and local governments, which have laid off 450,000 Americans. These are teachers and cops and firefighters. Congress should pass a bill putting them back to work right now, giving help to the states so that those layoffs are not occurring.

"In addition, since the housing bubble burst, we've got more than a million construction workers out of work. There's nothing fiscally responsible about waiting to fix your roof until it caves in. We've got a lot of deferred maintenance in this country. We could be putting a lot of people back to work rebuilding our roads, our bridges, some of ours schools.

"There's work to be done. There are workers to do it. Let's put them back to work right now. The housing market is stabilizing and beginning to come back in many parts of the country, but there are still millions of responsible homeowners who've done everything right, but still struggle to make ends meet. So, as I talked about just a few weeks ago, let's pass a bill that gives them a chance to save an average of $3,000 a year by refinancing their mortgage and taking advantage of these historically low rates. That's something we can do right now that would make a difference.

"Instead of just talking a good game about job creators, Congress should give the small-business owners that actually create most of the new jobs in America a tax break for hiring more workers.

"These are ideas that, again, have gotten strong validation from independent, nonpartisan economists. It would make a difference in our economy. And there's no excuse for not passing these ideas. We know they can work."

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"We've got a couple of sectors in our economy that are still weak. Overall, the private sector has been doing a good job creating jobs. We've seen record profits in the corporate sector. The big challenge we have in our economy right now is state and local government hiring has been going in the wrong direction. You've seen teacher layoffs, police officers, cops, firefighters are being laid off. And the other sector that is still weak has been the construction industry.

"Those two areas, we've directly addressed with our jobs plan. The problem is that it requires Congress to take action, and we're going to keep pushing them to see if they can move in that direction.

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Question: "What about the Republicans saying that you're blaming the Europeans for the failure of your own policies?"

"The truth of the matter is that, as I said we've created 4.3 million jobs over the last two -- 27 months; over 800,000 just this year alone. The private sector is doing fine.

"Where we're seeing weaknesses in our economy have to do with state and local government, oftentimes cuts initiated by, you know, 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.

"And so, you know, if -- if Republicans want to be helpful, if they really want to move forward and 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.

"Because the recipes that they're promoting are basically the kinds of policies that would add weakness to -- to the economy, would result in further layoffs, would not provide relief in the housing market, and would result, I think most economists estimate, in lower growth and fewer jobs, not more." 

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UPDATE: After we published this story, the president responded to the controversy over his commentsduring a joint appearance with President Aquino of the Philippines. Here is the transcript:

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Question: Mr. President, Mitt Romney says you're out of touch for saying the private sector is doing fine. What's your response?

Obama: Listen, it is absolutely clear that the economy is not doing fine. That's the reason I had the press conference. That's why I spent yesterday, the day before yesterday, this past week, this past month, and this past year talking about how we can make the economy stronger.

The economy is not doing fine. There are too many people out of work. The housing market is still weak and too many homes underwater. And that's precisely why I asked Congress to start taking some steps that can make a difference.

Now, I think if you look at what I said this morning and what I've been saying consistently over the last year, we've actually seen some good momentum in the private sector. We've seen 4.3 million jobs created -- 800,000 this year alone -- record corporate profits. And so that has not been the biggest drag on the economy.

The folks who are hurting, where we have problems and where we can do even better, is small businesses that are having a tough time getting financing; we've seen teachers and police officers and firefighters who've been laid off -- all of which, by the way, when they get laid off spend less money buying goods and going to restaurants and contributing to additional economic growth. The construction industry is still very weak, and that's one of the areas where we've still seen job losses instead of job gains.

So if we take the steps that I laid out to make sure that we're not seeing teacher layoffs and we're not seeing police officer layoffs, and we're providing small businesses with additional financing and tax breaks for when they hire or if they're giving raises to their employees; if we refinance housing -- or allow homeowners to refinance so they've got an extra $3,000 in their pocket so that they can spend money and contribute to further economic growth; if we're making sure that we're rebuilding, work that has to be done anyway, deferred maintenance on roads and bridges that could put construction workers back to work -- all those things will strengthen the economy, and independent economists estimate it would create an additional million jobs.

Now, you can't give me a good reason as to why Congress would not act on these items other than politics -- because these are traditionally ideas that Democrats and Republicans have supported. So let me be as clear as I can be. The economy needs to be strengthened. That's why I had a press conference.

I believe that there are a lot of Americans who are hurting right now, which is what I've been saying for the last year, two years, three years, what I've been saying since I came into office. And the question then is what are we going to do about it? And one of the things that people get so frustrated about is that instead of actually talking about what would help, we get wrapped up in these political games. That's what we need to put an end to.

So the key right now is for folks -- what I'm interested in hearing from Congress and Mr. Romney is what steps are they willing to take right now that are going to make an actual difference. And so far, all we've heard are additional tax cuts to the folks who are doing fine, as opposed to taking steps that would actually help deal with the weaknesses in the economy and promote the kind of economic growth that we would all like to see.

All right. Thank you very much, everybody. Thank you. Thanks. Thank you, guys.