UPDATE 1-Obama says US will dig itself out of economic hole

* Obama says economy moving in right direction

* More hard days ahead

* Election-year pressure to create jobs

* Accuses Republicans of peddling “snake oil”
(Updates with Obama quotes from political events)

By Alister Bull

KANSAS CITY, July 8 (BestGrowthStock) – President Barack Obama
defended his handling of the U.S. economy and blasted
Republicans on Thursday for “peddling snake oil” as he went on
a two-day campaign swing for fellow Democrats before November’s
congressional elections.

Obama has come under fire for bank and auto bailouts and a
$787 billion stimulus package whose effectiveness is a subject
of debate. He is under election-year pressure to reduce a 9.5
percent unemployment rate but said he was confident Americans
would “dig ourselves out of this hole”.

“We’ve got a long way to go,” Obama said at a Kansas City
electric car factory. “But what is absolutely clear is we’re
moving in the right direction.”

Obama was raising cash for the U.S. Senate campaigns of two
Democrats — Robin Carnahan of Missouri and Senate Majority
Leader Harry Reid of Nevada.

Reid is in a tough fight despite being the most powerful
Democrat in the Senate, a sign of an election year in which
many incumbents are running for their political lives.

At a pair of Carnahan events, Obama was biting in his
criticism of Republicans who look set to pick up seats from
Democrats in November in an election that some see as a
referendum on Obama’s first two years in office.

Obama said Republicans promote a “you’re on your own”
philosophy and would bring back policies that he believes have
been discredited, such as tax cuts for all including the
richest Americans.

“They are peddling that same snake oil that they’ve been
peddling for years and somehow they think that you will have
forgotten that it didn’t work,” Obama said.

Of concern among Republicans about deficit spending, Obama
said: “It is a little odd getting lectures on sobriety from
folks that spent like drunken sailors for the last decade.”

The president, who came to office promising to change the
tone in Washington, has found compromise impossible in the
hyper-partisan capital, a failure that each side blames on the
other.

All 435 seats in the House of Representatives are up for
grabs in the Nov. 2 election as well as 36 Senate seats.

Democrats hold a clear edge in the 100-member Senate over
Republicans, who need a near sweep of all of the competitive
races to pick up the 10 seats they need to gain control.

A poll by a Democratic-leaning organization, Democracy
Corps, said Americans plan to support Republican candidates
over Democrats in the election by 46 percent to 43 percent.

ELECTRIC CARS

Obama, who will face a tougher audience for his agenda if
Republicans make big gains in November, is trying to convince
impatient Americans that his economic policies are working and
that improvements will take time.

Obama pointed to the Kansas City electric car factory,
Smith Electric, as an example of how his policies are paying
off. It received $32 million in funding from his stimulus plan
and recently hired a 50th worker.

“The surest way out of this storm is to go forward, not to
go backwards,” he said. “There are going to be some hard days
ahead, That’s the truth. It’s going to take a while for us to
dig ourselves out of this hole.”

Missouri’s unemployment rate was 9.3 percent in May, a
touch lower than the national average, but Obama must still
convince voters his policies to create jobs are working and
overcome concerns over a record deficit and rising debts.

New U.S. claims for jobless benefits fell last week to
their lowest level in two months but unemployment remains
painfully high and other data on Thursday showed that consumers
continue to struggle. [ID:nN08209499]

Public doubt over spending more taxpayer money on top of
the $787 billion emergency spending plan Obama signed in 2009
has frustrated his administration’s efforts to get
congressional backing for additional stimulus measures.

This is despite concern that U.S. growth might flag as that
stimulus fades, reinforced by a disappointing June jobs report
that showed the economy lost 125,000 jobs last month.

The House voted last week to extend unemployment aid to
millions of long-term unemployed Americans but similar measures
have been thwarted by the Senate and there is no guarantee this
legislation will fare better.

The latest Gallup tracking poll had Obama’s job approval
rating at 44 percent, compared with 48 percent who
disapproved.
(Additional reporting by Caren Bohan and Matt Spetalnick;
Writing by Alister Bull and Steve Holland; Editing by Simon
Denyer and John O’Callaghan)

UPDATE 1-Obama says US will dig itself out of economic hole