"My view is that aggressive monetary and fiscal policy response to the recovery has been a net positive," said Mark Zandi, chief economist at Moody's Analytics.
But referring to the automatic cuts, he said, "Fiscal policies have turned from a very powerful tailwind to a pretty significant head wind." And, he added, "the economy is going to be tested again in the next few months."
Obama has been distancing himself from the potential consequences of the automatic cuts, even though he signed the legislation that put them in place. Initially, they were designed to be so onerous that it would force all sides to work out a long-term deficit-reduction and debt-stabilization package. But that agreement never materialized.
If the recovery has been slow, White House officials argue, it is because Republicans have been unwilling to yield to Obama's demands for deficit reduction that combines tax increases and cuts in spending.Obama himself seemed to touch on that viewpoint in his weekly address. "At a time when our businesses are gaining a little more traction, the last thing we should do is allow Washington politics to get in the way," he said while heralding good economic news. "You deserve better than the same political gridlock and refusal to compromise that has too often passed for serious debate over the last few years." Vitner, the Wells Fargo economist, argues that if anyone deserves credit for the recovery, it is the American public and American businesses "for being able to tune out all the noise that's coming from Washington." "It's remarkable," he said, "that in the face of so much political uncertainty we've been able to see the growth that we have."