Economy

Rep. John Shadegg (R-Ariz.) on Tuesday said halting the creation of new legislation would give companies the confidence to use the $1 trillion-plus in capital that so far remains on the sidelines.

Consumers in August spent an average of $61 per day, down from $68 a day in July and $67 in June, according to a new Gallup poll.

BLAME GAME — President Obama and Republicans pointed fingers at each other Tuesday over an economy showing signs of slowing down.

Obama, in his first remarks at the White House after his family vacation, tried to reassure the country that the economic recovery will hold, and pressed Republicans to allow a vote on a small-business lending bill.

Obama, in the Rose Garden, called GOP opposition “directly detrimental to our economic growth," reports The Hill's Sam Youngman.

The president "said his administration 'remains focused every single day' on improving the economy, and complained that the small-business bill has 'been languishing in the Senate for months.' " http://bit.ly/aFtz4W

GOP leaders Sen. Mitch McConnell (Ky.) and Rep. John Boehner (Ohio) hit back, saying Democrats have increased debt and would increase taxes by letting the Bush-era tax cuts for the wealthy expire.

McConnell: "So it’s no surprise that most Americans think the country is on the wrong track and that Democrat policies have failed to do anything to fix their top concern, the economy." http://bit.ly/cDIwHZ

Worth noting... GOP gets "unprecedented" 51 percent of support in Gallup generic ballot. http://bit.ly/d0b74x

Despite last week's downgrade of 2Q GDP growth, consumer spending rose 0.4 percent in July, the biggest jump since March. http://bit.ly/9mxFa3

Still, income growth was weak, and auto sales may hit a 28-year low. http://bit.ly/a6i4LY

Obama to address AFL-CIO on Labor Day. Sam Stein: http://huff.to/dAU14K

REVISITING THE SIZE OF THE STIMULUS

WH press secretary Robert Gibbs, when asked at his Tuesday briefing if the $814 billion stimulus was too small, said "nobody had, in January of 2009, a sufficient grasp at the sheer depth of what we were facing." http://bit.ly/bwuUNF

Left-leaning economists blog their disagreement.

CalculatedRisk recalls reports of Christina Romer pushing for a larger stimulus. http://bit.ly/csFRzY

Brad DeLong finds Gibbs "off message." http://bit.ly/adxAs8

But Megan McArdle doubts the stimulus could have been much bigger: "...even if Republicans had simply magically disappeared, the government still would not have been able to borrow and spend $2.5 trillion in any reasonably short time frame, much less $4-5 trillion." http://bit.ly/bOcejT

Matt Yglesias finds Fed vacancies forcing Bernanke to muddle the message, thus hurting the economy — and Dems' chances in the fall. http://bit.ly/cpbMNb

DEBT COMMISSION

Gibbs also said Tuesday that Alan Simpson will remain on the WH panel, despite his Social Security-as-a-cow e-mail. http://bit.ly/a2TdQ8

Dems on the fiscal commission more centrist than Republican members, Ezra Klein finds. http://bit.ly/citXAG

Something for the right: WSJ edit board says Obama is using the commission's talks on Social Security reform to play "bait-and-switch" on Republicans: "This has all the earmarks of a political bait and switch designed to ambush Republicans if they're gullible enough to believe his bipartisan pleas." http://bit.ly/alpx58

Sounds like the scenario Rep. Paul Ryan (R-Wis.) has warning about. http://bit.ly/cz7NCn

And something for the left: WaPo: "Women Set to Bear 72% of British Austerity Cuts."  http://bit.ly/ck6KFa 

NOW and other women's groups last week warned of the disproportionate effect that Social Security benefit cuts will have on women last week in going after Alan Simpson. http://bit.ly/d3o1OR

Budget impact story of the day: "Cash-Poor Governments Ditching Public Hospital." WSJ: http://bit.ly/aNgKXY

Coming Wednesday/Thursday... Financial Crisis Inquiry Commission to hold hearing on "too big to fail" with Bernanke, FDIC Chairwoman Sheila Bair, and former Lehman CEO Dick Fuld. http://bit.ly/aoM58k

U.S. Chamber of Commerce leaders are introducing Labor Day this week with a Thursday discussion on the policy issues they say are hobbling the job market.

President Obama on Monday renewed his call for the Senate to pass legislation providing tax breaks and loans to small businesses. 

The measure so far has been stalled by Republican opposition, much to Obama's chagrin. 

Pennsylvania Gov. Ed Rendell (D) said Monday the Obama administration needs to produce a targeted investment plan for infrastructure spending to change the November election outlook for Democrats. 

To shift the tide back into the favor of Democrats, President Obama needs "a fairly strong economic initiative" and, at the same time, should pin the responsibility on Republicans for not passing a small-business bill that would provide tax cuts and other incentives, he said today during an interview on MSNBC.

"Republicans repeat it like a mantra, 'we've got to help small business', but here we can put $30 billion into a lending stream and Republicans have single-handedly blocked it," Rendell said about the small-business bill that has languished in the Senate. 

Rendell didn't provide a dollar figure for the infrastructure investment but said Obama has to move forward with "a significant program to invest federal dollars into infrastructure spending."

Weakening economic indicators have prompted the United Steelworkers union to call on Congress to stop China's currency manipulation. 

Consumer spending picked up pace in July, hitting its highest level in four months as the demand for cars bolstered the numbers. 

Spending rose at a 0.4 percent pace last month after three months of relatively flat spending, the Commerce Department reported Monday. 

The gain in spending showed a 1 percent increase in demand for durable goods, about half of which came from consumers buying automobiles, the report said. 

Consumer spending was up 0.5 percent in March but was followed by a 0.1 percent drop in April, a slight 0.1 percent increase from May and flat spending in June. 

Personal incomes also were up 0.2 percent in July, but that's less than expected despite the improvement over June, when incomes remained unchanged. 

The Bureau of Labor Statistics (BLS) reports that July was the worst summer on record for youth seeking employment. 

Data released by the Commerce Department on Monday showed personal income inched up 0.2 percent in July, a modest improvement from June, when income stagnated.