Obama: GOP got country into economic mess

WASHINGTON -- With his Democratic Party facing the prospect of huge congressional losses in November, President Barack Obama tried Friday to draw sharp distinctions between Republicans and Democrats, arguing that Republican plans "are the exact policies that got us into this mess."

Obama, in his eighth news conference since he became president in January 2009, conceded that economic progress has been slow.

"For all the progress we've made," he said. "We're not there yet."

The news conference came as polls and analysts predict significant erosion in the Democrats' congressional majorities, and possibly a Republican takeover. Democrats now control 59 of the Senate's 100 seats and 255 of the House of Representatives' 435 seats.

On the eve of the anniversary of the Sept. 11, 2001, terrorist attacks, the president briefly discussed the war in Afghanistan, noting "that was the place where al-Qaida launched an attack that killed 3,000 Americans, and we want to make sure that we dismantle al-Qaida and Afghanistan is never again used as a base against Americans and the American homeland."

He defended the U.S. war against al-Qaida, saying that although mastermind Osama bin Laden remains at large, "we have the best minds, the best intelligence officers, the best special forces thinking about this day and night."

The economy dominated the news conference, however. On Friday, Obama named Austan Goolsbee to replace the departing Christina Romer as the chairman of the Council of Economic Advisers.

In selecting Goolsbee, Obama chose internal continuity over outside expertise. He was reported to have been searching for a prominent female macroeconomist to replace Romer, but settled on a man who'd been a close campaign adviser.

Goolsbee was a University of Chicago economist with strong free-market leanings. Former administration officials describe him as often at odds with former Treasury Secretary Lawrence Summers, who heads Obama's National Economic Council.

At 41, Goolsbee will be one of the youngest people ever to lead the White House Council of Economic Advisers. The lanky economist is well liked within the White House inner circle and enjoys a close relationship with Obama.

Obama tried Friday to show that he understands the nation's economic pain.

"People who have lost their jobs around the country and can't find one, moms who are sending out resumes and not getting calls back, worried about losing homes, not being able to pay bills, you know, they're not feeling good right now," the president said, "and I understand that."

His mission in the next few weeks, he said, is to remind people that Democrats have tried hard and succeeded, while Republican proposals are the ones "that got us into this mess." Obama plans rallies over the next few weeks in Wisconsin, Ohio, Nevada and Pennsylvania.

House Republican leader John Boehner of Ohio on Wednesday proposed freezing all tax rates for the next two years and cutting most government spending back to fiscal 2008 levels. Tax cuts enacted during the Bush administration expire at the end of this year, and the president wants to extend only those that affect individuals who earn less than $200,000 a year and joint filers who make less than $250,000.

Obama called the GOP plan "holding middle-class tax relief hostage" so that millionaires can prosper.

"If you want the same kind of skewed policies that led us to this crisis, then the Republicans are ready to offer that," the president said.

Why not, he said, extend the middle-class tax cuts, since virtually everyone agrees that's worthwhile?

"My position is let's get done what we all agree on," he said.

The president spent much of the news conference trying to draw other distinctions between the parties. He urged passage of legislation that would provide billions of dollars for a small business loan fund, as well as some tax breaks.

The bill has been stalled in the Senate for weeks, and is expected to be the first major order of business when lawmakers return to Washington on Monday after a nearly monthlong recess. The measure is expected to pass with some Republican support.