JULY 5, 2010, 4:30 P.M. ET.

Obama, in Reagan Fashion, Focuses on Economic Growth

By GERALD F. SEIB

The great economic debate emerging in Washington—simple and a bit simplistic—goes like this: Should the U.S. government be spending more money to stimulate the sagging economy, or should it be saving money because of the giant budget deficit?

That's an important question, to be sure, but something has gone missing in the argument: What about economic growth, which could help stimulate the economy and fight the deficit at the same time?

This week, the Obama administration is trying to shift the discussion back to economic growth.

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There are obvious economic reasons to do so. President Ronald Reagan, faced with a similar toxic mix of high deficits and a wheezing economy in the early 1980s, found a relentless focus on economic growth to be a magic elixir that simultaneously pulled the economy, the deficit and his policies out of the danger zone.

There are equally obvious political reasons to shift the conversation to growth. Simply put, both stimulus and deficit-fighting have become politically problematic.

Economists will argue for years about how much good stimulus spending has done to ease the ravages of the deep recession, but many voters aren't convinced of its worth. In a recent Wall Street Journal/NBC News poll, 42% said they didn't think the big stimulus legislation passed last year would help the economy. Any legislation called an "economic-stimulus bill" has become toxic in Congress.

And while a growing number of Americans say they want spending cut to address big deficits, that message is equally problematic. Much as people say they want lower spending, they are a lot less happy when a program they like is cut than they are when somebody else's pet program gets the knife.

Beyond that, a strong pushback is emerging on the left wing of President Barack Obama's Democratic party, whose denizens argue it's wrongheaded to focus on fighting deficits right now, when the recovery is stumbling and in need of additional juice from government spending.

So the current debate isn't a great one for the administration. Growth is a better message.

That's where Mr. Obama is trying to take the discussion this week, administration aides say. The push started Saturday, when he devoted his weekly radio address to talking about $2 billion in Energy Department grants going to two solar-energy companies: a solar-power plant in Arizona and a Colorado plant making solar panels.

Spending money on the solar plants puts the president on the wrong side of the deficit-cutting impulse, but it also allowed him to talk about creating more than 5,000 jobs, at a time when overall job-creation numbers are frail. In the same vein, Mr. Obama this week will visit a Kansas City facility that makes electric delivery vehicles, with help from a $32 million grant from stimulus-bill funds.

Next, the White House will try to move on to expanding American exports, a theme that was big in Mr. Obama's State of the Union address this year but which has gotten lost in the shuffle in recent months. Mr. Obama will meet this week with a recently created "export council" of business leaders who are supposed to help find ways to expand American exports.

More substantively, administration officials are working behind the scenes to write legislation that will lift some Cold War-era controls on exports of American technology. That's a particularly important step for business with China; Chinese leader Hu Jintao recently told Mr. Obama that U.S. exports to China could be ramped up if some of those controls went away. The legislation is likely to be finished within the next couple of weeks, and congressional hearings are expected by month's end.

All that continues a recent fixation on trade. In recent days, the president also promised Russian President Dmitry Medvedev that he'd push to get Russia into the World Trade Organization—and in return got a Russian pledge to resume imports of U.S. chickens, a trade-off that might be worth a billion dollars annually to the American poultry industry.

Mr. Obama also has revived a languishing U.S.-South Korea free-trade agreement, a move that risks riling his organized-labor allies but which could be a winner if he gets South Korea to open the door to more American auto and beef exports.

Beyond that, watch for the president to find a way down the road to signal to Colombia and Panama that he's interested in reviving free-trade deals with them.

Republicans will look askance at much of this growth push, arguing that, now as in the Reagan era, tax cuts are the surest tool for cranking up growth. It's an argument with resonance. Even so, growth still may be a better topic than either stimulus or austerity for the White House right now.

Write to Gerald F. Seib at jerry.seib@wsj.com

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