Obama Advisers Say Jobs Are Key Focus in Boosting Economy; Deficit Comes Next
December 14, 2009 - 6:58 AM"We are in a very special kind of economic situation, and frankly, jobs have to be the top priority, and every bill is going to be a jobs bill going forward," said Lawrence Summers, director of the White House National Economic Council.
At the same time, Christina Romer, chairman of the White House Council of Economic Advisers, said she would not consider the recession truly at an end until employment returns to levels last seen at the end of 2007 when the recession began.
Her view was technically at odds with that of Lawrence Summers, director of the White House National Economic Council, who said third quarter growth of the gross domestic product -- the measure of economic activity -- marked a statistical end to the recession.
But the pair did agree with forecasts that the economy would begin producing more jobs in the spring, a trend that could lower the nation's jobless rate from 10 percent.
"I believe that, as do most professional forecasters, that by spring, employment growth will start to be turning positive," Summers said.
Romer agreed but cautioned that the upward trend could be hit by poor showings in some months as those who had given up looking for work re-enter the labor market.
"I would anticipate some bumps in the road as we go ahead," Romer said.
The administration took heart when the November jobs report showed only 11,000 people joined the unemployment rolls. That figure had been as high as 700,000 in January, when Obama took office.
To keep pace with new job seekers entering the work force for the first time, the economy needs to create 100,000 jobs a month.
"We can make incredible progress, we can get that unemployment rate coming down," Romer said. "The whole key is not just growing again, you've got to grow robustly, that's how you get a lot of job creation, that's how you get a lot of progress on the unemployment rate."
The administration's focus on creating jobs first and worrying about the deficit second shows itself in the president's call for using $200 billion left over from the $700 billion bank bailout to further stimulate the economy. He wants to create jobs through spending to improve the nation's infrastructure, lending to small businesses and financial incentives for Americans to make their homes more energy efficient.
"What I'm interested in is a targeted jobs package that can help to boost what's already taking place. Companies are already starting to hire again. Is there a way to boost their confidence and I think there is," Obama told CBS' "60 Minutes" in an interview airing Sunday night.
Even so, long-term worries about increasing the deficit are evident as Obama continues to insist that the long and politically charged attempt to overhaul America's health care system not increase U.S. government indebtedness, and with indications the reforms could increase taxes.
Concerned that government spending not be hamstrung by deficit fears, Democrats broke a Republican filibuster Saturday and on Sunday passed a huge end-of-year $1.1 trillion spending bill that gives budget increases far exceeding inflation to much of the government.
"We are in a very special kind of economic situation, and frankly, jobs have to be the top priority, and every bill is going to be a jobs bill going forward," Summers said.
Senate Republican leader Mitch McConnell of Kentucky said of Summers: "I hope he's right, that we're beginning to come out of this economic slowdown but unemployment is the key."
Even as Obama was looking to dip into the leftover money in the Troubled Assets Relief Program, the $700 billion Bush administration emergency fund created to prevent a banking collapse, he also was meeting Monday with leaders of the private financial sector to push them to increase lending to small businesses and consumers.
In selected excerpts of an interview with CBS's "60 Minutes," Obama said the big financial institutions still "didn't get it."
"Now the financial community has got to think about its obligations to the country," Summers said, listing the need for the big banks to:
--Stop trying to kill legislation that would regulate the industry;
--Moderate bonus payments, realizing the institutions were saved with taxpayer money;
--Increase the flow of credit to small business;
--Boost efforts to prevent home mortgage foreclosures.
Earlier this year, Obama took that same message to Wall Street. He received a muted response from financial barons who watched as the stock market was in the midst of a rapid recovery even as the overall economy was languishing.
Summers appeared on ABC's "This Week" and CNN's "State of the Union," while Romer was on NBC's "Meet the Press." McConnell was on CBS' "Face the Nation."
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