Category: Jobs / Money
No new stimulus, but Obama seeks jobs ideas
02/09/2010, by AFP
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The White House Thursday ruled out an "extraordinary" new economic stimulus plan to fire up the slowing recovery, but said President Barack Obama was scouting new ideas to boost jobs and growth.

Comments by Obama's spokesman followed remarks by a departing White House economic aide seen by some observers as a call for more stimulus, and as the administration braced for new data on the moribund jobs market.

Fresh scrutiny of Obama's policies also coincided with almost daily worsening forecasts of the political meltdown which may loom for his Democratic Party in November's mid-term congressional elections as the economy sours.

The sluggish recovery is bound up with slower-than-hoped for jobs growth and has helped to depress Obama's public approval ratings into the mid-40s, a factor weighing heavily on his party as the crucial election nears.

"Some big, new stimulus plan is not in the offing," White House spokesman Robert Gibbs said

"I do not anticipate something that rivals the extraordinary measures that the president has already taken up."

Republicans are fiercely attacking the stimulus plan, branding it a huge waste of government money that has failed to meet the rosy jobs and growth projections that the administration laid out.

Obama however, argues that he inherited an economy in deeper trouble than anyone thought in early 2009, and that the bill did nothing less than stave off a second Great Depression.

Four straight quarters of economic growth mean the economy, though still wounded, is convalescing, he says.

However, the government last month slashed second quarter growth figures to 1.6 percent from 3.7 percent in the first quarter, stoking fears of anaemic future expansion and even a double dip recession.

Gibbs did say that the president had asked advisors to come up with a new set of measures that could be used to boost the economy and jobs growth, though his tone seemed to suggest those programs could be somewhat modest.

With many lawmakers fretting as elections loom, public concern mounting over the forecast 1.4 trillion dollar budget deficit and Republicans mounting obstruction tactics, Obama's political leeway on the economy is limited.

And there is little political appetite in Washington for a repeat of his earlier 814 billion dollar stimulus plan, which critics say did not work and backers complained was not big enough to dig out of a huge economic hole.

Gibbs declined to say what measures were being contemplated by Obama's economic team, though top of his list is a package which would cut taxes and loosen credit for small businesses in a bid to unleash job creation.

The bill has been mired in Congress for weeks, and the administration has been pleading with lawmakers to pass it, as grim economic data has piled up and soured what the White House had termed "Recovery Summer."

Other possible options for Obama include further business tax cuts, a payroll deduction on new hires designed to boost jobs growth or even a new national infrastructure spending program.

There may also be an attempt to aid those states which have "balanced budget rules" which may be forced to cut spending and jobs in a move that could counteract other efforts to boost growth.

Obama on Monday pledged a "full scale attack" to speed up the recovery following the worst slump since the Great Depression.

Democrats are planning votes in the coming weeks on extending tax cuts passed during the presidency of George W. Bush for businesses and families earning less than 250,000 dollars a year.

But they want to let cuts on those pulling in more than that wage expire, sparking a fierce row with Republicans who argue the move will crimp spending and slow growth.

Obama's departing chair of the Council of Economic Advisors Christina Romer raised eyebrows with her farewell speech on Wednesday.

"We have tools that would bring unemployment down without worsening our long-run fiscal outlook, if we can only find the will and the wisdom to use them," Romer said.

When the Labor Department's August report comes out Friday, economists are predicting modest jobs growth, but the headline figure could be negative as temporary census workers are laid off.

Some observers predict the unemployment rate could edge up to 9.6 percent from the current 9.5 percent -- and give the White House a further political headache.

Obama was expected to address the unemployment situation following the release of the report, Gibbs said.

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