Clear economic victory eludes Obama as vote nears

In the two years since Obama took office, the US economy has improved dramatically Barack Obama does not yet know the identity of his 2012 Republican challenger, but his toughest reelection challenge could be to convince voters the economy is in steady hands.
In the two years since Obama took office, the US economy has improved dramatically. Growth has swung from -4.9 percent to plus 3.1 and firms are no longer bleeding jobs.

But the 44th president lacks a clear-cut economic victory that would propel him toward reelection and delay the arrival of number 45 for four more years.
Today, 13.5 million workers are still jobless, the government is running record budget deficits and the housing market still undergoing major renovations.
With 18 months until the polls, it is a safe bet the election will again be about the economy, stupid.
Two in three Americans think it is the biggest problem facing the nation and Obama is getting the blame: Nearly the same ratio disapprove of his economic management, more than at any time during his presidency.
That is a frustrating statistic for a president who helped the United States clamber through its toughest recession in 80 years.
Ironically, the policies that helped Obama end the downturn are part of the problem.
Massive stimulus and bailout spending had been ferociously attacked for swelling the national debt, which now stands at over $14 trillion, a record.
With a push from Tea Party Republicans, deficits and debt have become fodder for mainstream voter anger.

The White House argues unemployment would have been much worse without those policies, but even if true, it is difficult to prove.
"The recovery has really been slower than people had expected," said Phillip Swagel, a former White House economic adviser.
"He can still make the case that he inherited a difficult situation, but is a little harder than if the economy were really firing on all cylinders."
And Democrats hoping for a pre-election economic boom are likely to be disappointed.
With the Federal Reserve gradually edging away its stimulus spending and debt fears making further government priming impossible, a snap drop in unemployment is unlikely.
According to Tony Fratto, a former adviser to president George W. Bush, "the big question for the president is 'will the economy sustain itself?'"
According to Fratto, "that is an open question."
The Federal Reserve estimates that unemployment will be between 7.7 to 8.2 percent in 2012, down from 8.9 percent today but still at the highest levels seen at an election post World War II.
Since then, Ronald Reagan is the only president to win reelection with unemployment over seven percent.

Obama might take heart from the fact that Reagan won reelection while unemployment hit 10.8 percent during his tenure -- during Obama's term it has not been higher than 10.1 percent.
But he is still left with a tough sell in key states were unemployment is well above the national average, such as Florida, Ohio, North Carolina, Nevada and California.
"It is a middling hand that he has, he doesn't have a hand full off aces," said Fratto.
"But he has got to play the hand that he has, and the question is, does he play it well enough to win."