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Obama Calls for Aid to States, Says 'Private Sector Doing Fine'

JIM WATSON/AFP/Getty Images(WASHINGTON) -- Amid fresh concerns about the durability of the U.S. economic recovery and the threat of financial shocks from Europe's debt crisis, President Obama today urged lawmakers to send more federal aid to states and localities to boost hiring, asserting "the private sector is doing fine."

"We've created 4.3 million new jobs over the last 27 months, over 800,00 just this year alone. The private sector is doing fine," Obama said during a morning news conference in the White House briefing room.

"Where we're seeing weaknesses in our economy has to do with state and local government. Often times, cuts initiated by governors or mayors who are not getting the kind of help that they had in the past from the federal government. And they don't have the same kind of flexibility as the federal government does in dealing with fewer revenues coming in," he said.

As part of the $447 billion American Jobs Act, first proposed late last year, Obama would allocate federal tax dollars for infrastructure and construction projects and the hiring of teachers and first responders. The White House estimates the proposal could put more than 1 million Americans back to work.

Congress has enacted parts of the plan, including a payroll tax cut extension and a measure to help military veterans find jobs. But the bulk of the bill has languished because of stiff opposition from Republicans for its price tag and proposed tax hikes to cover it.

"If Republicans want to be helpful, if they really want to move forward and put people back to work, what they should be thinking about is how do we help the state and local governments and how do we help the construction industry because the recipes that they’re promoting are basically the kinds of policies that would add weakness the economy, would result in further layoffs, would not provide relief in the housing market," he continued.

The GOP was quick to scoff at Obama's comments, accusing him of trying to deflect blame for the inefficacy of his policies to restore robust economic growth and insensitivity for saying "the private sector is doing fine."

"President Obama's bound to be a surprise to the 23 million Americans who are struggling for work and the millions of families who have seen their incomes fall under the Obama economy," said Republican National Committee spokeswoman Kirsten Kukowski. "Between relying on government to create jobs and blaming headwinds for his economic failures, it's clear President Obama doesn't have a clue how to create jobs or turn the economy around."

The Labor Department reported just 69,000 jobs created in May – continuing 27 months of growth but well below economists' expectations and a smaller gain than seen in each of several months before. The national unemployment rate also ticked up to 8.2 percent last month.

The U.S. economy has added roughly 4.3 million new jobs over the past two years, including 800,000 this year alone.

"The fact is, job growth in this recovery has been stronger than in the one following the last recession a decade ago, but the hole we have to fill is much deeper and the global aftershocks are much greater," Obama said today. "And that's why we've got to keep on pressing with actions that further strengthen the economy."

Obama's press conference, his first since May 21, comes as his re-election campaign faces a tough start to June, with polls showing a tightening race with Republican rival Mitt Romney and monthly fundraising totals showing Republicans surging ahead. The Obama campaign is making a renewed push to promote the president's jobs plan in a new battleground state TV ad, casting blame on Republicans in Congress for undermining his efforts to put Americans back to work.

Meanwhile, the European debt crisis continues to loom over the general election race, seen by the president and his advisers as one of the most significant threats to further economic recovery and Obama's re-election.

"The good news is there is a path out of this challenge," Obama said of the financial mess, but added that "getting there is going to take some time."

The issue will take center stage at the G20 summit of global leaders in Cabo San Lucas, Mexico, later this month, where Obama is expected to attend.

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