A day after President Barack Obama acknowledged he was exploring "additional options to promote job creation,” Washington opinion leaders and policy makers on Sunday cautioned against a new stimulus package, urging more targeted steps to ease mounting unemployment.
Former Federal Reserve Chairman Alan Greenspan and Sens. Chuck Schumer (D-N.Y.) , John Cornyn (R-Texas), Barbara Boxer (D-Calif.) and Jon Kyl (R-Ariz.) in appearances on Sunday shows all rejected or brushed aside suggestions of another stimulus, with Greenspan and Cornyn questioning whether Obama’s first stimulus was proving effective.
The discussion followed the release last week of worse-than-expected jobs numbers – and predictions that unemployment will rise still further.
Obama in his Saturday radio address called the numbers “a sobering reminder that progress comes in fits and starts and that we will need to grind out this recovery step by step."
Greenspan, Schumer and Cornyn, speaking on ABC’s “This Week,” expressed support for extending unemployment benefits, which the House of Representatives moved to do last week, passing legislation Friday that would provide 13 more weeks of benefits to states with unemployment rates of 8.5 percent or higher.
Schumer predicted the Senate would pass a bill this week that “will go beyond what the House was,” while he and Cornyn both expressed support for extending tax credits for home purchases.
Greenspan, though, warned against broader steps, telling host George Stephanopoulos “the focus has got to be on trying to get the economy going, but you also have to be careful that in trying to do too much you can actually be counterproductive. And we are in a recovery, and I think it would be a mistake to say the September numbers alter that significantly. … It's premature to act on this type of information.”
The Labor Department on Friday reported that 263,000 jobs were lost last month, pushing the unemployment rate from 9.7 percent in August to 9.8 percent in September.
Greenspan predicted the rate would “penetrate the 10-percent barrier and stay there for a while before we start down.”
But he said Obama should not include another stimulus “for two reasons. One, only 40 percent of the first stimulus has been in place. And there is a considerable debate going on in the economics profession about how effective this stimulus package is. And so mainly because of the fact that as broad as it is and as effective as it will turn out to be, it still has got 60 percent left to go. So in my judgment it's far better to wait and see how this momentum that has already begun to develop in the economy carries forward.”
Cornyn was less charitable, asserting “the stimulus so far has been unsuccessful in achieving the goals the president set out for it. He said, with the stimulus, we'd seen 8 percent – no higher than 8 percent unemployment.”
Schumer shot back: “The stimulus is working. The American people see it. Forty percent has been spent. Before the stimulus, we were losing 700,000, 800,000 jobs a month, a huge amount. It's going down.”
Kyl, speaking on CNN’s “State of the Union,” asserted “targeted tax relief for Americans would be the quickest way out of this recession.