In ailing Nevada, Obama bets on his economic strategy

President Obama wrapped up a two-day sales pitch for his administration’s economic policies by pushing for a $5-billion expansion of tax credits for clean-energy manufacturing, an industry that recession-worn Nevada has clung to as a potential lifeline.

The proposal was part of a swing through Missouri and Nevada in which the president played campaigner in chief for a pair of struggling Senate candidates and a tough defender of his party’s attempts to steady the still-flailing economy. Convincing voters that the economic stimulus package, for instance, helped limit the recession’s blow is essential for Democrats to hold onto their majorities in Congress.

Having suffered arguably the steepest economic fall of any state, Nevada is a key battleground. Senate Majority Leader Harry Reid’s career hangs in part on whether Nevada voters believe the economy can rebound under Democratic stewardship.

That’s a tough sell. The once high-flying state has a 14% unemployment rate, the nation’s highest, and on the way to the polls, voters will pass foreclosed homes, abandoned strip malls and the skeletons of frozen construction projects. Economists generally agree that tourist-reliant Nevada cannot recover until the rest of the nation has enough cash and confidence to vacation again.

Republicans — including Reid’s opponent, former state lawmaker Sharron Angle — have contended that a more laissez-faire approach might have helped the economy spring back more quickly. In that sense, the midterm elections have become a war of fiscal philosophies.

This week, Angle’s team rolled out its inaugural campaign ad, which hammered away at the economic crash. Images of presumably jobless workers are paired with stark headlines, such as “Nevada takes dubious jobless title from Michigan.” The ad closes with the promise: “Help is on the way.”

On Friday, Obama touted the proposed tax-credit expansion, likely to be included in an energy bill being drafted for debate in the Senate, as an example of the benefits of Washington steering the economy. The solar energy industry, which has long eyed sun-bleached Nevada, has supported adding to the $2.3 billion in manufacturing credits the stimulus package offered. Obama said the proposal could help create nearly 40,000 jobs nationwide.

“Our role in government, especially in difficult times like these, is to break down barriers that are standing in the way of innovation,” Obama told college students and community leaders at the University of Nevada, Las Vegas. “It’s to unleash the ingenuity that springs from our people. It’s to provide an impetus for businesses to grow and expand.”

Obama mentioned his tour Thursday of Smith Electric Vehicles in Kansas City, Mo., which he said was planning to double its work force to 100 employees.

“The reason for their success is their entrepreneurial drive. But it’s also partly because of a grant we’re offering companies that manufacture electric vehicles and the batteries that power them,” Obama said.

The president’s trip also was intended to fill campaign coffers and boost enthusiasm for Missouri Senate candidate Robin Carnahan and Reid, both of whom are lagging behind their GOP opponents. On Thursday night, a more aggressive Obama framed the midterm contests as “a choice between the policies that led us into the mess, or the policies that are leading out of the mess.”

Still, the incumbent party historically bears the brunt of electoral malaise.

“While Harry Reid and Barack Obama sing each other’s praises, more than 192,000 unemployed Nevadans are still looking for jobs,” said Jahan Wilcox, a spokesman for the Republican National Committee.

Lisa Mascaro in the Washington bureau contributed to this report.