President-elect Obama raised the jobs forecast for his stimulus plan from 3 million to as many as 4 million on Saturday, upping the ante of his economic blueprint for the second time in three weeks.
The president-elect also rebutted conservative claims that his plans would create new bureaucracies, saying 90 percent of the new jobs would be in the private sector, up from the “more than 80 percent” he claimed last weekend.
Two weekends before he takes the oath of office, Obama also said he now favors a slightly bigger price tag. “We have assumed a package just slightly over the $775 billion currently under discussion,” says a 13-page report released Saturday by his transition office.
The report, “The Job Impact of the American Recovery and Reinvestment Plan,” warns: “In the absence of stimulus, the economy could lose another 3 to 4 million more” jobs.
A graph in the report shows the unemployment rate, which was 7.2 percent in December, crossing 9 percent “without recovery plan.” With the plan, unemployment still rises through the first half of 2009, then peaks and begins to fall.
The report is by Christina Romer, his incoming chair of the Council of Economic Advisers, and Jared Bernstein, Vice President-elect Biden’s chief economic adviser.
Just three weeks ago, Obama declared a goal of saving or creating 3 million jobs over two years. Now, his new report estimates the dividend from his plan would be 3,675,000 by end of 2010.
“The report confirms that our plan will likely save or create three to four million jobs,” Obama says in his weekly radio and YouTube address. “Ninety percent of these jobs will be created in the private sector. The remaining 10 percent are mainly public sector jobs we save, like the teachers, police officers, firefighters and others who provide vital services in our communities.”
Republicans and conservative commentators had distorted the earlier private-sector estimate of “more than 80 percent” to claim he was contemplating 600,000 new bureaucrats – something Obama officials said was never the case.
Nearly half a million jobs would be created by investing in clean energy. The plan has nearly 400,000 new jobs repairing the nation’s infrastructure, including roads and businesses.
The breakdown is energy, 459,000 jobs; infrastructure, 377,000 jobs; health care, 244,000 jobs; education, 250,000 jobs; temporary programs to “protect the most vulnerable from the deep recession, including increases in food stamps and expansions of unemployment insurance,” 549,000; state relief, 821,000; the “Making Work Pay” tax credit for the middle class, 505,000; and business tax incentives, 470,000.
The increased estimate provides a new incentive for quick action by congressional leaders in both parties, who have balked at the specifics of Obama’s plan.
“If nothing is done,” Obama says in the radio address, “economists from across the spectrum tell us that this recession could linger for years and the unemployment rate could reach double digits – and they warn that our nation could lose the competitive edge that has served as a foundation for our strength and standing in the world.”
The stimulus proposal has run into stiff resistance on Capitol Hill, where Senate Democrats this week criticized it as too heavy on tax cuts and not heavy enough on shovels-in-the-ground work and jobs.
Obama’s report tries to address that complaint head-on, acknowledging that tax cuts and aid to states struggling with budget deficits “are likely to create fewer jobs” than spending government cash to fix roads and bridges, but the report says he has no choice but to mix up the stimulus options.
Of the nearly 4 million jobs, he claims roughly 1 million jobs of the jobs saved or created will result from the plan's tax cuts and business tax incentives.
“Because there is a limit on how much government investment can be carried out efficiently in a short time frame, and because tax cuts and state relief can be implemented quickly, they are crucial elements of any package aimed at easing economic distress quickly,” the report said.
Obama's address came a day after a Labor Department report showing the nation lost 2.6 million jobs last year, the most in a calendar year since the end of World War II. The unemployment rate for December was a jarring 7.2 percent.
“The numbers are a stark reminder that we simply cannot continue on our current path,” Obama says. “It’s not too late to change course – but only if we take immediate and dramatic action.”
The language on private-sector jobs shows Obama’s willingness to tinker with his plans to win widespread support in Congress. Obama aides have told congressional aides that they hope to win 80 or more votes in the Senate, which would not only signal broad popularity for the plan but also make mean Republicans, too, would be staked in the plan's success, and the deficit spending that would ensue.
On Friday, Obama signaled changes in the tax sections aimed at shoring up Democratic support, and Republicans will be hard-pressed to thwart a jobs lifeline being pushed hard by a popular president.
During the campaign, Obama had promised 1 million new jobs over an unspecified time. He bolstered that to saving or creating 2.5 million over two years in his radio address just before Thanksgiving. Then for Sunday papers the weekend before Christmas, aides said he had raised the target to 3 million, based on bleak new forecasts from economists.
The report is available here.
