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WASHINGTON (Reuters) - President Barack Obama stressed on Friday the U.S. economy was "not doing fine," seeking to clarify his earlier comments about the health of the private sector that Republicans pounced on to try to paint him as out of touch.
Speaking to reporters in the Oval Office, Obama said that while corporate profits were strong and companies had been adding jobs, small businesses were having a tough time getting financing and other pockets of the economy needed more attention.
Earlier in the day, Obama had told a news conference that the private sector was "doing fine," but that budget-pinched states needed help.
Republicans seized on Obama's comments on the state of the private sector, with House of Representatives Speaker John Boehner saying, "Mr. President, take it from me, the private sector is not doing well."
Presumptive Republican presidential nominee Mitt Romney, who is seeking to unseat Obama in the November 6 election, called his statement "an extraordinary miscalculation."
In his later comments, Obama repeated his view that state and local governments needed help to avoid teacher and police layoffs, and that Congress should help buoy struggling homeowners and construction workers who remain out of work several years after the financial crisis.
"It is absolutely clear that the economy is not doing fine, that's the reason I had a press conference," the Democratic president said, seated next to Philippines President Benigno Aquino.
Asked about Romney's response to his earlier comments, Obama accused Republicans of lacking ideas about how to help the U.S. economy fully recover.
"What steps are they willing to take right now that are going to make an actual difference? So far, all we have heard are additional tax cuts for the folks who are doing well," he said.
In a campaign stop in Iowa, Romney, who has stressed his private-sector experience, said, "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.
"It's an extraordinary miscalculation and misunderstanding by a president who is out of touch, and we're going to take back this country and get America working again, Romney added.
At a news conference, Boehner, the top congressional Republican, slammed the Obama healthcare law for making it harder for small businesses to hire. "Listen, the American people are still asking the question, ‘Where are the jobs?' Boehner said.
Other Republicans criticized Obama's argument that cuts to state and local government staff were dragging down growth.
Obama is "the one who saddled us with all these federal rules and regulations that don't allow governors to have the freedom to do what we really want," New Jersey Republican Governor Chris Christie told a Conservative Political Action Conference in Chicago.
"And then he has the audacity to stand up this morning and say that it's the nation's governors and the nation's mayors who are driving our economy down by not hiring enough people for government work."
Reporting By Laura MacInnis and Alexandra Alper; Editing by Peter Cooney