President Obama credited the tax cut extension deal he forged with Congress for helping to turn around the unemployment problem.

During his weekly address on Saturday, Obama referred to the latest job numbers that the Labor Department released on Friday (see Employment Increased by 192,000 in February).

“We have a lot more work to do, not just for the Americans who still don’t have a job, but for the millions more who still don’t have the right job or all the work they need to live out the American Dream,” Obama said, speaking from a classroom at Miami Central High School. “But the progress we’re seeing says something about the determination and ingenuity of our people and our businesses.  What’s also helping to fuel this economic growth are the tax cuts that Democrats and Republicans came together to pass in December and I signed into law—tax cuts that are already making Americans’ paychecks bigger and allowing businesses to write off their investments, freeing up more money for job creation.”

Obama emphasized that the two parties would need to work together on the budget. Congressional leaders agreed last week to a two-week temporary budget deal with $4 billion in spending cuts that would avert a government shutdown, at least until March 18 (see Government Shutdown Averted (for Now)).

“Just as both parties cooperated on tax relief that is now fueling job growth, we need to come together around a budget that cuts spending without slowing our economic momentum,” said Obama. “We need a government that lives within its means without sacrificing job-creating investments in education, innovation and infrastructure.”

However, Obama emphasized that lawmakers need to be careful about what areas are cut to balance the budget and tried to fend off attempts to cut parts of the budget that are important to the administration's policies. "Getting our fiscal house in order can’t just be something we use as cover to do away with things we dislike politically," he said. "And it can’t just be about how much we cut. It’s got to be about how we cut and how we invest. We’ve got to be smart about it. Because if we cut back on the kids I’ve met here and their education, for example, we’d be risking the future of an entire generation of Americans. And there’s nothing responsible about that."

In the Republican response, a member of the freshman class in the House, Rep. Diane Black, R-Tenn., spoke in favor of making deeper spending cuts. “What we need is a new approach—a path to prosperity that gets government out of the way by cutting unnecessary spending and removing barriers to job growth,” she said. “We need to unleash our nation’s economy instead of burying it under a mountain of regulation, taxation and debt.”

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