By Hans Nichols – Oct 5, 2011 10:02 PM GMT+0100
White House Chief of Staff William Daley said the administration expects the U.S. will avoid falling into another recession even as the debt crisis in Europe remains “of great concern.”
“We’re very concerned about the possibility, but the expectations as of right now is that we would not see a double dip,” Daley said at a forum in Washington sponsored by the Aspen Institute and the Atlantic magazine.
President Barack Obama is in close contact with his European counterparts, and “the expectation is that they will take action to prevent serious negative results” for the global economy, Daley said.
He said the president’s $447 billion package of tax cuts and spending aimed at spurring hiring will help create “some buffer” for the U.S. economy as growth remains sluggish. It’s clear that the forecasts for economic expansion that were made at the start of this year “are not going to be fulfilled,” Daley said.
Federal Reserve Chairman Ben S. Bernanke said yesterday the central bank can take further steps to sustain a recovery that is “close to faltering.”
The state of the economy means Obama will face a “very tough and close election” in 2012, Daley said. He called the political sentiment in the country “extremely volatile” and criticized Republican lawmakers, who he said have take a “hard- line position of ‘no,’” to anything Obama proposes.
He refused to say who among the candidates for the Republican presidential nomination would be the toughest opponent for Obama.
“Whoever the Republican Party nominates will be a formidable candidate because the nation is very divided,” he said.
The Standard & Poor’s 500 Index climbed 1.8 percent to 1,144.03 at 4:30 p.m. in New York, adding to yesterday’s 2.3 percent surge. Reports depicting faster-than-forecast growth in payrolls and service industries and rising fuel demand tempered concern the economic recovery was in jeopardy.