Lew: IRS targeting not politically motivated

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Democrats and Republicans, especially those on the House Oversight and Government Reform Committee, have traded barbs over who up the White Huse chain might have known about the targeting, including President Obama. 

Panel Democrats have asserted that the GOP tried to tie the White House to the IRS's decision to more thoroughly examine Tea Party applications.

But Republicans argue that they never said the order came from the president while acknowledging that Tea Party groups "are enemies of the president’s politics.”

Meanwhile on Wednesday, Obama criticized Republicans for focusing on "phony scandals" instead of the economy in a speech at Knox College in Galesburg, Ill. 

As the economy battles to pick up steam, Obama and Congress still remain at odds over what policies will best help.

"So, I think that we have a job in Washington and in public policy to make the right decisions and to show that we’re staying on the course that’s going to keep the economy growing and keep opportunities for the American middle class growing," Lew said on Wednesday night.

"I think that every time Washington has a divisive fight that suggests that we may become part of the problem, it actually hurts," he said. 

"It hurts in that confidence. Economics is really a lot of kind of collective psychology. When people feel better about the future, they act better and the economy picks up. When people worry, it also has an effect on the economy."

Lew said he thinks that the core of the economy is "showing the resilience that gives reason to be confident about America's future."

But he also said that policymakers have to broaden their thinking to tackle the hurdles still facing the economy. 

He highlighted that while the unemployment rate is falling it still remains stubbornly high, and includes a high percentage of people who have been out of work for at least six months. 

"I think that this question of confidence is at the core," he said. 

"Employers make decisions to add full-time staff, to add plant and equipment when they have confidence in the future. Our job in terms of setting policy is to make clear that there’s a basis for that confidence."

This posted was updated at 7:55 p.m.