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By Dan Balz
Nothing may be more important to public assessments of President Obama’s leadership than the state of the economy and at this point there are political warning lights flashing.

In light of the latest unemployment figures, there are more persistent questions coming at the administration. Did Obama and his team get it right last winter when they put together their $787 billion stimulus package or did they undershoot? If they did make a mistake, what should they do now?

The administration is trying to dampen down talk that they didn’t get it quite right. Vice President Biden opened the door to questions on Sunday, telling ABC’s George Stephanopoulos, “We and everyone else misread the economy.” But he insisted that the stimulus applied “is the right package given the circumstances we’re in.”

Obama, in Moscow, tried to modulate the impact of the vice president’s words that the administration had somehow miscalculated. “No, no, no, no, no,” he told NBC’s Chuck Todd. “Rather than say misread, we had incomplete information.” To ABC’s Jake Tapper, he said, “There’s nothing that we would have done differently. We needed a stimulus and we needed a substantial stimulus.”

What both Obama and Biden were trying to explain away was the dissonance between their early assurances that the big stimulus package would hold the unemployment rate to around 8 percent with Thursday’s report showing it at 9.5 percent. The jobless rate is expected to rise further in the months to come, with some economists projecting that it will go above 10 percent for the first time since 1982.

It is hard to square an assessment that the administration underestimated the severity of the recession and the assertion that the White House wouldn’t have done anything different had it known how bad things really were. At the time, there were some economists who warned that even a package as big as $800 billion was not enough to deal with the severity of the economy’s collapse.

One reason the president and others may have confidence in their stimulus package is that so little of the money has actually been spent. That is not necessarily by design–administration officials said at the time of passage that money would flow quickly. Now, the fact that it hasn’t provides some hope to these officials that when it does arrive its impact will be felt. “The second hundred days you’re going to see a lot more jobs created,” Biden insisted on Sunday.

Biden said it was premature to decide whether a second stimulus package is needed, as some economists have suggested. Earlier this spring, administration officials were convinced they couldn’t get another package through Congress even if needed.

Obama was equivocal on the question of whether there is something more to do, saying that is something “that we wrestle with constantly.” But he added that there were legitimate concerns about the size of the deficit all the current spending will create. “In the midterm and long term we’re going to have to get control of that,” he said on ABC.

Concerns about whether the stimulus package is or will work are the last thing Obama needed at this moment. White House Chief of Staff Rahm Emanuel has set the administration’s calendar to focus all energies this month on the legislative battle over health care. Questions about the economy, about the need for more stimulus, would only complicate hopes for passing what other presidents have failed to get done.

Obama continues to argue that health care reform is a critical piece of his plan to fix the economy, long term. But there are even some Democrats outside the administration who worry that Obama and his team may have taken their eye off the economy, that they are not sufficiently vigilant in making sure that they produce the job growth they have promised since January.

So far, Obama hasn’t been blamed for the overall state of the economy, which he repeatedly reminds people is something he inherited from his predecessor. But there continue to be indications of slackening confidence in his remedies.

A recent Washington Post-ABC News poll recorded a noticeable decline in the percentage of people who said they believed the stimulus package had or would work–and that was before the unemployment rate rose again. That poll also found that rising optimism about the direction of the country had hit a plateau–or even begun to slip.

On Tuesday came another, perhaps more troublesome, signal of disenchantment with the president’s policies, in a survey of attitudes in the state of Ohio by Quinnipiac University. In the past two months, Obama’s overall approval rating dropped from 62 percent to 49 percent. His economic approval rating also fell, from 57 percent to 46 percent (to 48 percent who said they now disapprove).

Earlier this year, when the president’s approval ratings dropped, it was largely because of a falloff among Republicans. In the poll of Ohioans, Republican approval of Obama dropped only a bit. More significant was the sharp decline among independents and even a modest drop among Democrats.

Obama’s economic approval rating among independents plummeted between May and July, falling from 51 percent to 33 percent. His overall approval among these critically important voters dropped from 59 percent to 38 percent.

The poll of Ohioans also found that men in particular have soured dramatically on the president’s leadership, with majorities saying they disapprove of his overall leadership and his handling of the economy.

Ohio is just one state–admittedly a politically sensitive state–and the Quinnipiac poll is just one survey. Much more will be needed to fill out the picture of Obama’s presidency. But the shifts are big enough to warrant attention from the president’s political and economic advisers.

Administration officials may be right in believing that the stimulus package will kick into higher gear during the remainder of this year and that no further action may be needed. But getting the economy right remains the most important challenge facing the Obama administration.

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