While President Bill Clinton’s political advisers favored more spending and tax cuts coming out of the recession of the early 1990s and his economic team pushed to start reducing deficits, in President Obama’s circle the opposite is true. Political advisers are channeling the widespread public anger at deficits while the economic team argues that the government should further spur the economy to avert another recession.  In Mr. Clinton’s day, the economic team, asserting that a credible commitment to fiscal responsibility would reassure financial markets and lead to greater long-term growth, won the argument in favor of deficit reduction, helped by moderate Democrats in Congress. These days, the Obama political team has the edge, again in the cause of emphasizing deficit reduction and with an assist from Congressional Democrats nervous about the midterm elections.  Even so, the proponents of additional stimulus got more ammunition on Friday with the government’s release of disappointing jobs numbers for June, confirming that private sector hiring has slowed from earlier this year. The evidence of the shaky recovery underscored the stakes in the continuing debate in the White House and Congress, especially as states and cities are raising taxes and cutting tens of thousands of public employees to balance their budgets, and debt-laden European governments are retreating from stimulating their economies.  “We still have a great deal of work to do to repair the economy and get the American people back to work,” Mr. Obama said on Friday. Yet the steps he highlighted to show the government’s concern — some public works projects — are part of the two-year stimulus package he won a month after taking office, rather than new initiatives. Over the last few weeks, Democrats in the Senate have failed to muster enough votes to pass a new package of measures to address the economic weakness, reflecting what some of them see as the political perils of further deficit spending.  Within the White House, all of the Obama advisers, along with many outside economists, agree that both things are needed — additional stimulus this year and, before long, a clear sign that the government will soon take actions on taxes and entitlement spending, phased in over time, to reduce a debt that mounted during the recession to the highest levels since World War II. The advisers’ debate is over the timing and scale of any stimulus or deficit reduction.  Those pressing for more stimulus measures include Christina Romer, the chairwoman of the Council of Economic Advisers; Jared Bernstein, economic adviser to Vice President Joseph R. Biden Jr.; and the Treasury secretary, Timothy F. Geithner, who took that message internationally to the Group of 20 summit meeting of developed nations last weekend in Canada. Lawrence H. Summers, who as director of the National Economic Council tries to broker what he calls the “brakes-versus-accelerator” debates, nonetheless makes the economic arguments for an additional stimulus, officials say.  More focused on deficits — or at least on positioning Mr. Obama to show his concern — are his chief strategist, David Axelrod, other political advisers and Rahm Emanuel, the White House chief of staff, according to Democrats. Their lone supporter among the top economic aides is Peter R. Orszag, the budget director, who will leave the administration this month.  Mr. Axelrod, in an interview, said he often argues for emphasizing deficit reduction in part because “it’s my job to report what the public mood is.” He added, “I’ve made the point that as a matter of policy and a matter of politics that we need to focus on this, and the president certainly agrees with that.”  But Mr. Axelrod said that he and Mr. Obama are also concerned that cutting the budget too soon could retard the recovery or even provoke a relapse like in the Depression era, when the government’s premature turn from stimulus to cutting deficits spawned another recession in 1937.  So while the administration is pursuing “a long-term strategy for reining in these deficits,” Mr. Axelrod said, “I’m very much allied with the economic group, because even as a political matter it would be very shortsighted to take steps that would send us backward.”  Critics on the left, however, say that Mr. Obama has hurt the current effort to pass a final spurt of stimulus spending and tax cuts by his rhetorical emphasis on cutting future deficits, along with recent policies for a three-year freeze on domestic appropriations, more power to rescind spending and his bipartisan fiscal commission to recommend ways to shrink the long-term debt.  Mr. Obama’s antideficit talk has stoked a skittishness among Democratic lawmakers about adding to the deficit, the critics say, while his failure to campaign consistently for the stimulus measures he proposed in his State of the Union address and in the subsequent budget have allowed those proposals to languish in Congress.  The president and his advisers “want economic stimulus but they fear the politics, especially in the Senate, are working against them,” said Roger Hickey, co-director of the liberal group Campaign for America’s Future. “But I think they’ve contributed to that climate of fear about deficits.”  Last weekend at the G-20 conference, however, Mr. Obama and Mr. Geithner made a strong pitch for stimulus measures and took issue with Europeans’ plans to cut spending and raise taxes instead. According to administration officials, the president and his Treasury secretary figured the political risk back home of being seen as arguing against slashing deficits was less than the economic risk of another global downturn.  In the United States, the administration’s ambivalence about promoting legislation to help create jobs, given public opposition to rising debt, reflects a shift from late last year when the economy, while recovering, was still shedding jobs.  Then, officials say, it was the political advisers who told the economic team to come up with a big package of new and extended stimulus proposals. By February, in his annual budget Mr. Obama outlined $266 billion in “temporary recovery measures” to save or create jobs.  But as antideficit fever built, and senators grew more nervous about another high-cost stimulus package, the White House advertised only about $100 billion of that. Now the entire agenda is in doubt.
The Obama White House is contending with a policy battle that was last waged under President Bill Clinton.