Obama Says U.S. Economy Facing Several ‘Tough’ Months

By Roger Runningen

Feb. 1 (Bloomberg) -- President Barack Obama said the U.S. economy is “in for a tough several months” before a recovery takes hold.

“It’s going to take a number of months before we stop falling and then a little bit longer for us to get back on track,” Obama said today in an interview with NBC.

The president said once his economic stimulus plan has made it through Congress, his administration will be unveiling a more extensive plan to deal with financial-market regulation. Both are part of his plan to help pull the U.S. out of a recession.

The world’s largest economy shrank at an annual pace of 3.8 percent in the fourth quarter, the most since 1982, the Commerce Department reported last week. U.S. job losses hit 2.6 million in 2008, the most since 1945. Plunging demand and frozen credit are causing companies from Caterpillar Inc. to General Motors Corp. to pare jobs and output to prevent unsold goods from piling up.

The unemployment rate likely climbed to 7.5 percent in January from 7.2 percent in December, according to the median estimate in a Bloomberg News survey ahead of Labor Department figures Feb. 6. Other reports may show manufacturing, services and housing shrank further, signaling more firings ahead.

“We’re going to have to straighten out the credit markets,” Obama said.

Hurdle Cleared

Obama’s economic recovery plan cleared the first hurdle last week when the House passed a $819 billion package of tax cuts and spending. Senate Republicans now are pushing for revisions.

Arizona Republican Senator Jon Kyl said earlier today that support for Obama’s plan is “eroding” among his colleagues.

“There would be major structural changes that would have to occur,” for Republicans to support it, Kyl said on “Fox News Sunday.” Kyl, the second-ranking Republican in the Senate, said the measure is too expensive, ineffective and would require “huge amendments” to win over members of his party.

Obama, who met with lawmakers of both parties at the Capitol to lobby for their support, said today that Republicans “have some good ideas, and I want to make sure those ideas are incorporated.” He offered no details.

The House legislation passed without a single Republican vote. The president declined to predict the number of Republican votes the Senate package would get.

Iraq Troops

Obama also said many of the U.S. troops in Iraq can expect to be out of that country by this time next year as the Iraqis take more responsibility for their own security. Obama ran his campaign on a pledge to withdraw U.S. combat forces in 16 months.

“We are in a position to put more responsibilities on the Iraqis” following elections yesterday in that country, Obama said.

The president said his family is adjusting to life in the White House. Daughters Malia and Sasha have “already joined some clubs” at school and Sasha has joined a basketball team.

“What more could I want?” he said. “I’m seeing them now more than anytime in the last two years, and that’s been great for the whole family.”

Obama granted an interview, broadcast live from the White House, to NBC before the kickoff of Super Sunday XLIII in Tampa, Florida. It was part of the network’s six-hour pre-game show leading up to the National Football League’s championship game between the Pittsburgh Steelers and the Arizona Cardinals.

Sports Allegiances

Obama’s allegiance is to the Chicago Bears, who didn’t make the cut this year, so he’s backing the Pittsburgh Steelers. The decision may not have been difficult: the president got election support from Steelers team owner Dan Rooney and former Steelers running back Franco Harris. Obama also carried Pennsylvania in the election. Arizona voters backed for home state candidate Senator John McCain.

The president maintained his bipartisan outreach program by inviting 15 members of Congress to the White House for the event, though there’s a distinct tilt toward the Steelers.

Among guests, five are from Pennsylvania’s congressional delegation, including both of the state’s senators, Democrat Bob Casey and Republican Arlen Specter. Rooting for Arizona will be Democratic Representative Raul Grijalva and Republican Representative Trent Franks.

To contact the reporter on this story: Roger Runningen in Springfield, Virginia at rrunningen@bloomberg.net