Coatless, the sleeves of his white shirt rolled up, microphone in hand, bottled water at the ready, he fielded questions for an hour from ordinary folk perched on picnic tables and settled into Adirondack chairs in the leafy backyard of Ohio natives Rhonda and Joe Weithman in Columbus.

Nine asked about pocketbook issues — pension plans, jobs, Social Security, the cost of healthcare and childcare. Obama sprinkled his predictable answers with personal touches like how his and wife Michelle’s student loans took 10 years to pay off and were mostly higher than their mortgage, and how the fine print in credit card statements could flummox any of us, including “a pretty smart guy” like him.

The 10th question was shouted from left field. As Obama made his way out of the Weithmans’ garden, a reporter wanted to know if he regretted inserting himself into the emotionally charged debate over whether a Muslim cultural center and mosque is built near Ground Zero in New York City.

Obama, a former constitutional law professor, spoke at length on Friday night about religious freedoms and the legal right of Muslims to build it, setting off a political firestorm and requiring a “refinement” by lunchtime on Saturday when he said he was not commenting on the wisdom of such a move.

“The answer is, no regrets,” he said today and quickly moved on.

 Five words. Pretty smart.

 Here are our top stories from today…

Obama: U.S. must tackle deficit without denting recovery

President Barack Obama said the United States must work out how to control its long-term deficit without hurting an economic recovery, which remains hobbled by a battered housing market. Obama acknowledged the deficit is worrying Americans and said cutting it would raise the public’s confidence.

For the full story by Patricia Zengerle, click here.

For Obama’s remarks on the controversial Muslim community center, click here.

Home refinancing demand at highest in 15 months

Mortgage applications leaped last week as rock-bottom interest rates lifted demand for home refinancing to its highest level in 15 months, a development that could portend stronger economic growth. Home loan refinancing puts extra cash into consumers’ hands that can be used to pay off existing debt or funnel money into the economy through extra spending.

For more of this story by Julie Haviv, click here.

SEC charges New Jersey with securities fraud

The Securities and Exchange Commission said it charged New Jersey with securities fraud for failing to disclose to municipal bond investors that it was underfunding its pensions. New Jersey, the first state ever hit with securities fraud charges by the SEC, agreed to settle the case without admitting or denying the findings, the SEC said.

For more of this story, click here.

Analysis: Retail numbers show path slow to economic growth

Pinks and reds may be the big colors for the fall, but retail executives are seeing only gray skies ahead. Shoppers are still spending cautiously, several top retailers said in the past two weeks as they reported quarterly earnings, giving weight to the idea that economic recovery would remain weak beyond 2010. This reluctance to shop would also slow growth in retail earnings heading into the crucial holiday season and leave investors with few attractive options in retail stocks, analysts said.

For more of this story by Brad Dorfman, click here.

U.S. announces new joint exercise with South Korea

The U.S. military will conduct an anti-submarine warfare exercise with South Korea early next month, sending a message to the North that Washington is committed to defending its ally, the Pentagon said. Pentagon spokesman Bryan Whitman said the joint exercise, which is likely to annoy regional power China, would be conducted off the western coast of the Korean Peninsula and was aimed at defending against “sub-surface” attacks, particularly following the sinking of one of the south’s warships in March.

For more of this story by Sue Pleming, click here.

What we are blogging…

Democrats try turning mosque debate against GOP

Democrats were stunned and somewhat speechless last August when Republicans accused them of proposing “death panels” as part of their healthcare reform initiative. This August, it’s the proposed construction of a Muslim cultural center and mosque near lower Manhattan’s “Ground Zero” that is dominating the end-of-summer doldrums.  Once again, Democrats are struggling to gain the upper hand in the debate.

To read Richard Cowan’s full blog, click here.

Tips from juror for Blago retrial 

Patrick Fitzgerald take note — when you retry Rod Blagojevich, keep it simple. That’s the advice of the foreman of the hung jury that was unable to reach a unanimous verdict on 23 counts in the corruption case against the ousted Illinois governor.

For more of Deborah Charles’ blog, click here.

From elsewhere…

One-fourth of renters will never buy a home

More than a quarter of Americans currently renting houses and apartments have no intention to ever buy a home, according to a survey. The survey, by real estate search site Trulia.com, found 27 percent of renters do not plan to ever buy a home. Although 72 percent still expect to buy eventually, that proportion is down from 77 percent six months ago.

For the full story, click here.

Harvard tops university list

Harvard retains the crown as top university for the eighth year in an annual ranking of the world’s universities which is dominated by the United States but shows China’s performance improving. The 2010 Academic Ranking of World Universities (ARWU), published since 2003 by the Center for World-Class Universities of Shanghai Jiao Tong University, said the United States dominates the list with eight in the top 10 and 54 in the top 100.

For the full story, click here.

Photo credit: Reuters/Larry Downing (Obama meets with local families in Ohio)

Experts had expected a drop in claims and the unwelcome surprise indicated that hiring is still weak and employers may return to cutting staff.

The grim data came two days after the Fed warned that the pace of the recovery had slowed and the trade deficit widened, sending economists back to their drawing boards to revise growth forecasts. China’s economy also showed signs of going off the boil.

On the political front, the outlook wasn’t much brighter. An NBC News/Wall Street Journal poll showed pessimism on the rise  — almost two thirds of Americans believe the economy will get worse before it gets better — a bad omen for Obama and Democrats with congressional elections less than three months away.

But we found some voters outside the Beltway to be less-than-thrilled with the Republican alternatives.

“We’re stuck between a party of bad ideas and one of no ideas,” said Dayton, Ohio retiree Jeni Wilson. “I wouldn’t say we’re spoiled for choice.”

Here are our top stories from today:

Jobless claims jump shows labor market ailing

The number of workers filing new claims for unemployment insurance unexpectedly rose last week to its highest level in close to six months, a fresh signal of a weak jobs market. The number of new claims for jobless benefits rose 2,000 to 484,000 in the week ended August 7, the second straight increase, the Labor Department said. Economists had expected claims to edge down to 469,000.

For more of this story by Corbett B. Daly’s story, click here.

Congressional election fails to stir voters

Democratic control of Congress and the fate of President Barack Obama’s agenda are on the line in U.S. congressional elections this November, but some voters do not seem thrilled with their choices. Discontent with Obama and his fellow Democrats in Congress as the economy struggles and the deficit soars has energized some conservatives, including the Tea Party movement, and boosted Republican chances of winning the House of Representatives and perhaps even the Senate.

For more of this story by Nick Carey and James B. Kelleher story, click here.

Analysis: Democrats and Republicans struggle with base

An unpredictable election year is threatening to become even more topsy-turvy as both Democrats and Republicans face uprisings from their liberal and conservative bases of support. Examples abound: President Barack Obama, on track to end the U.S. combat role in Iraq by the end of August, is scorched by some liberal commentators for still having troops there at all.

To read the rest of Steve Holland’s story, click here.

Extreme weather plagues farming, talks flounder

Global wheat markets reeling from Russian droughts, thousands of cattle killed by heat in Kansas, and countless crop acres wiped out by floods in Pakistan are glimpses of what can be expected as the world struggles to battle climate change. But as concerns mount over extreme weather hitting global food systems this year, governments are no closer to forging a pact to fight climate change.

To read the rest of Timothy Gardner’s analysis, click here.

Congress approves border security bill

Congress passed legislation to strengthen security along the border with Mexico, trying to tackle the politically sensitive issue of illegal immigrants ahead of November congressional elections. The Senate passed the bill on a voice vote, two days after the House of Representatives interrupted a six-week recess to approve it and another measure providing aid for struggling states.

For more of this story by Susan Cornwell, click here.

Special Report: Shorting Wall Street on the campaign trail

As Lehman Brothers spiraled to its doom in the summer of 2008, John Kasich could not help but worry. After all, Kasich, a former Ohio Congressman turned investment banker, had a chunk of his personal wealth invested in the free-falling firm. “I would make a few calls to friends of mine, like one guy in Chicago, and we would just sit there and say, ‘Is the stock going to go any lower?’” Kasich, 58, said during an interview at his gubernatorial campaign headquarters in Columbus, Ohio, the city where he ran a two-man investment banking office until after Lehman’s bankruptcy on September 15, 2008. “I didn’t really fixate on it. You just kept doing your job and you saw crazy things happening.”

For this full story by Steve Eder, click here.

USDA cuts world wheat view, but says no repeat of ’08

World wheat supplies will be tighter than expected as a devastating drought in Russia and its neighbors erodes healthy stockpiles, but the U.S. Agriculture Department said on Thursday there was no reason for rising prices to stage a repeat of 2008′s historic surge. In its August report, the Agriculture Department cut its world wheat production forecast by 2.3 percent to 645.73 million tonnes, its first estimate since Russia, normally the world’s No 3 wheat exporter, banned shipments to conserve domestic stocks.

 For more of this story by Charles Abbott and Roberta Rampton, click here. 

 Mortgage rates hit fresh lows on soft U.S. economy

Home loan rates set new lows in the latest week on more evidence of a soft U.S. economy and high unemployment, home funding company Freddie Mac. The average 30-year mortgage rate fell to 4.44 percent in the week ended Aug. 12, the lowest since Freddie Mac records began in 1971. The prior record low was 4.49 percent a week ago, which was well below 5.29 percent a year ago.

For more of this story by Lynn Adler, click here. 

What we are blogging…

One more secret at CIA – next week’s Top Chef winner and loser

The Central Intelligence Agency has one more secret to keep this week — who won the Top Chef challenge in next week’s episode. The TV cooking competition, in which House Speaker Nancy Pelosi was a guest judge and declared herself a “foodie,” previewed the coming week when the competing chefs do their thing at the intelligence agency. A smiling CIA Director Leon Panetta was shown in the snippet tasting an entry at a white-tablecloth table.

To read Toby Zakaria’s full blog, click here.

Photo credit: Reuters/Hyungwon Kang (pedestrian braves severe thunderstorm in Washington in June)

“This is what I wake up to in the morning and this is what I go to bed at night thinking about … my job is to get this fixed. … I take responsibility … I’m fully engaged,” he insisted near the end of his first formal, full-scale White House news conference in almost a year.

Lest there be any confusion: “The American people should know that from the moment this disaster began, the federal government has been in charge of the response effort,” he said.

Asserting control comes with a calculated risk. It is Obama’s disaster now and any failure to stop the gusher will likely be his.

In the 37 days since the Deep Horizon rig exploded, killing 11 people and sending a continuous stream of oil from a ruptured BP well 1 mile down on the seabed, Obama has been under pressure to take charge.

Even his 11-year-old daughter, not to mention a frustrated U.S. electorate, expects him to stop an oil spill that has stymied scientists and engineers.

“You know, when I woke up this morning and I’m shaving, and Malia knocks on my bathroom door and she peeks in her head and she says, ‘Did you plug the hole yet, Daddy?’” Obama said.

A CBS News poll this week found 35 percent of Americans surveyed approved of the Obama administration’s handling of the disaster, 45 percent disapproved and 20 percent were undecided.

‘WAKE-UP CALL’

Obama needed to reassure those people on Thursday. He used words like “tragedy,” said he was angry and frustrated, and referred to the spill as a “wake-up call” for a revamped energy policy. He invoked science, dying turtles and “birds flying around with oil all over their feathers.”

He said the administration was overseeing the effort to address the spill, admitted it was slow to challenge BP’s estimates of the amount of leaking oil, and attacked the government agency responsible for offshore drilling.

In short, he positioned himself — again — to be the opposite of his Republican predecessor, former President George W. Bush, whose widely panned response to the environmental and human crisis that was Hurricane Katrina helped define his administration.

Bush’s top political adviser, Karl Rove, did not buy it.

“It took Mr. Obama 12 days to show up in the region. Democrats criticized President George W. Bush for waiting four days after Katrina to go to New Orleans,” he wrote in a piece for The Wall Street Journal published earlier on Thursday.

“Where has its plan been? And why has the White House been so slow with decisions?”

Americans like it when politicians take responsibility for mistakes, and Obama’s message may gain him some sympathy.

Whether it was convincing enough may be out of his hands. The president said the government did not have better technology than BP did to fix the problem.

That means no matter how often Obama expresses anger or how fast he addresses the related regulatory problems, Americans will worry until BP can plug the leak and the mess is cleaned up.

(Additional reporting by Steve Holland; Editing by Howard Goller and Peter Cooney)

Toward the end of his first term, his predecessor George W. Bush famously said in answer to a question that he could not think of any mistakes he had made — a comment which long dogged him as the U.S. overthrow of Saddam Hussein in 2003 led to chaos in Iraq.

When Obama was asked the same question on Monday, he was quicker on his feet.

“Oh, we make at least one mistake a day,” he said with a smile.

“But I will say this, I don’t think we’ve made big mistakes,” he told Reuters in an interview in the Oval Office. “I don’t think we’ve made fundamental mistakes.”

When asked to give a few examples of errors, Obama regretted how his team had handled some of the early vetting of administration appointments, a reference to problems with personal taxes that knocked some key picks out of contention.

He also mentioned regret over how he had “phrased commentary” on the controversial arrest of a prominent African American Harvard University scholar in Cambridge earlier this year, when he said police had acted stupidly and was later forced to backtrack.

“I mean, there are constant sort of things that I think have proven unnecessary distractions,” he said.

“But in terms of the core decisions that we’ve made to rescue the economy, to move forward on a path for moving our troops from Iraq, on making sure that we’ve gone through a rigorous process in Afghanistan, to how we have moved healthcare to a place that seven presidents have not been able to get to, I feel very good about our progress.”

(Editing by Frances Kerry)