Obama has a lot riding on economy’s revival

President Obama, pressing the case for an $800-billion-plus stimulus package, acknowledged Tuesday that failing to revive the economy could cost him a second term as president.

Continuing his tour of struggling cities, Obama spoke to about 1,500 people here, warning that the stimulus bill should not become a casualty of Washington infighting.

“We can’t afford to posture and bicker and resort to the same failed ideas that got us into this mess in the first place,” said Obama, who was introduced by Florida’s Republican governor, Charlie Crist.

Obama shared with the crowd a piece of fresh information, handed to him by an aide midway through the event: “I just want to announce that the Senate just passed our recovery and reinvestment plan. . . . That’s good news!”

The audience clapped, but the stock market wasn’t as kind to the administration’s economic policies. Stocks fell sharply, with losses mounting after Treasury Secretary Timothy F. Geithner rolled out a separate rescue plan tailored for the financial sector.

The Senate and House still must resolve differences over the stimulus plan before the president can sign the bill into law.

Thrown on the defensive by Republican charges that the bill is laden with pork, Obama has tried to shift the spotlight to people who urgently need government assistance.

The Fort Myers region has been ravaged by home foreclosures and unemployment has hit 10%. Obama received a raucous welcome, though in interviews some people voiced unhappiness that a few of Obama’s Cabinet choices had failed to pay some taxes. But they voiced support for the stimulus and said they wanted Obama to succeed.

“I was a little disappointed by some of the picks for his administration, but people make mistakes,” said Ann Tetreault, a retired nurse. “People need to give him a little bit more support right now. He can’t do it all in a couple of days.”

Although Obama enjoys a high approval rating, he said those numbers would collapse if the complicated and costly economic plans he has put forward failed to work.

Obama asked people to be patient. He said that a recovery could take years. At that, someone in the crowd shouted, “You have eight!”

But Obama said he was under no illusions that his popularity could withstand a prolonged downturn. “If stuff hasn’t worked and people don’t feel like I’ve led the country in the right direction, then you’ll have a new president,” he said.

Obama said that in the next few weeks, he would lay out a proposal in which banks and homeowners agree to certain concessions to avoid foreclosure. Banks would commit to not evict certain homeowners and in turn would get a share of equity in the house once the market recovered.

Though he is offering the grimmest picture of the economy at these forums, Obama is doing it in freewheeling fashion. When a woman became emotional telling him she had no home, Obama shook her hand and leaned in to hug her. He promised to have his staff talk with her afterward.

The president tried to encourage a student who said he was working at McDonald’s and needed better benefits. Obama asked what he was studying, and the man boisterously said he wanted to be a deejay or a broadcaster. “Well, you sound like you’ve got a good communications skill,” Obama said.

Later, Obama told ABC News’ Terry Moran on “Nightline” that he was walking a line between warning Americans of how dire the economic situation is and causing panic.

“I’m constantly trying to thread the needle between sounding alarmist but also letting the American people know the circumstances that we’re in,” he said in the interview for Tuesday night. “And the fact of the matter is -- is that we are in not just an ordinary recession. We are in a perfect storm of financial problems.”

Though the Senate approved the stimulus bill, setting the stage for negotiations with the House, the stock market plunged on word of the Treasury Department’s vague new financial remedy.

“Wall Street, I think, is hoping for an easy out on this thing, and there is no easy out,” Obama said on “Nightline,” according to excerpts released by ABC News. “Essentially what you’ve got are a set of banks that have not been as transparent as we need to be in terms of what their books look like.”

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peter.nicholas@latimes.com