April 22, 2011 / 8:14 PM / 8 years ago

Analysis: For Obama, it's the U.S. economy, again

WASHINGTON (Reuters) - Just when it seemed the U.S. economy was turning the corner, back it comes again to haunt President Barack Obama as he begins his 2012 re-election campaign.

Obama is now facing Americans in a sour mood, as high gasoline prices siphon more money from their pocketbooks and threaten the nation’s fragile recovery.

Several new polls this week underscore the challenge for Obama and his re-election team and may bolster the hopes of Obama’s potential Republican challengers who are weighing campaigns to unseat him.

A New York Times-CBS News poll published on Friday said the number of Americans who think the economy is getting worse jumped 13 percentage points in one month, and 70 percent of those polled said the country is on the wrong track.

“The president is very aware of it and concerned by rising gas prices which have put added pressure on Americans as they deal with an economy that is recovering but is not back to where it needs to be,” said White House spokesman Jay Carney.

Obama’s own job approval rating is hovering in the mid-40s, hardly a strong show of confidence. A Washington Post-ABC News poll said 57 percent of Americans did not approve of his handling of the U.S. economy and 58 percent did not like his handling of the budget deficit.

Political experts say a rapid jump in gasoline prices to around $4 a gallon is driving much of the concern along with a jobless rate still well over 8 percent.

Obama this week ordered the Justice Department to probe whether there is any fraud in the energy markets, but otherwise has said he sees no short-term solution to high gas prices. The country must take steps to wean itself from imported oil, Obama has said.

A protracted battle in Washington over budgets, debt and America’s $1.4 trillion deficit is also a factor, with both parties facing a critical battle over raising the U.S. debt ceiling in the weeks ahead.

The dangerous implications of the budget battle were underscored this week by Standard and Poor’s threat to downgrade America’s triple-A credit rating on worries that Washington will fail to address its fiscal woes.

CHALLENGE TO SHOW THINGS IMPROVING

Congressional Republicans get even poorer marks on their handling of the budget battle. The New York Times-CBS poll found 63 percent did not approve of Republicans’ performance in this area.

But none of those Republicans are expected to run for president in 2012, although some party activists would like Representative Paul Ryan to get in the race.

Presidential elections more than anything else usually turn on economic issues, and Obama’s challenge will be to convince Americans the country is on an improving track and that better days lie ahead.

“What ordinary folks are going through still, even after the economy has started growing again, is something that keeps me up at night, and it’s something that I think about the first thing when I wake up in the morning,” Obama said this week in San Francisco.

Democratic strategist Chris Lehane, a former adviser to then-Vice President Al Gore, said it is important for Obama and his team to take the long view and remind Americans how far the economy has rebounded from the 2008 Wall Street meltdown.

“They inherited an economy that was in terrible shape and are turning the ship around. This is a long-haul effort,” Lehane said.

Experts believe Obama has plenty of time to turn it around and still think he is a strong favorite to win re-election since he is running as an incumbent against a still-unformed Republican field that lacks star power.

Most polls show Obama tracking ahead of would-be Republican contenders. Obama’s difficulties, however, may inspire his Republican challengers to believe they could actually win.

“This Republican Party nomination is worth fighting for,” said Republican strategist Scott Reed.

Additional reporting by Jeff Mason; editing by Todd Eastham

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