- The Washington Times - Saturday, April 11, 2009

President Obama sounded optimistic notes about the economy Friday, saying “glimmers of hope” are emerging as credit begins to flow to small businesses and stimulus money kicks in across the country.

Mr. Obama, who huddled with Fed Chairman Ben S. Bernanke and his economic team, was cautious, but used the word “progress” six times in brief remarks to reporters. He cited as evidence a 20 percent increase last month in the largest lending program run by the Small Business Administration.

“What that means is that small businesses are starting to get money that allows them to keep their doors open, make payroll, and that is going to contribute to our overall economic growth, as well as help make sure that people are able to keep their jobs,” he said.

Mr. Obama also credited his advisers with helping to stabilize the financial markets, and for having plans for “additional actions” as needed.

“And when you combine it with the other efforts that are being made across the country for infrastructure projects, for the kinds of innovative energy programs that were part of the recovery package, what you’re starting to see is glimmers of hope across the economy.”

The remarks came one day after Mr. Obama lauded positive signs in the housing market: an increase in mortgage refinancings combined with historically low interest rates, something he mentioned again Friday.

“That has the effect of not only putting money in the pockets of people, but also contributing to stabilization of the housing market,” Mr. Obama said.

The president said that the economy is “still under severe stress,” and more job losses are expected, but that many Americans are seeing a slight boost in their paychecks thanks to his “Making Work Pay” tax cut.

“If we stick with it, if we don’t flinch in the face of some difficulties, then I feel absolutely convinced that we are going to get this economy back on track,” Mr. Obama said.

Earlier Friday, the Treasury Department said the deficit increased to $192.3 billion in March, higher than the $150 billion that economists expected.

The ballooning deficit is a problem for Mr. Obama, who has proposed a $3.5 trillion budget that he says is an investment in the nation’s top priorities: education, health care and alternative energy.

Republicans and some Democrats have expressed great concern about spending too much and burdening future generations.

Meanwhile, several banks have been repaying bailout money to the U.S. Treasury. But the largest bailed-out banks are awaiting the results of “stress tests” to determine whether they are strong enough to return the money. Federal regulators have asked banks not to reveal their performances for fear of undermining confidence if others do not follow suit, the Associated Press reported.

The government is aiming to announce the stress test results in one block at the end of April.

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