White House warming to jobs-related legislation

AP News
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Posted: Dec 02, 2009 5:31 PM

On the eve of President Barack Obama's jobs forum, the White House is warming to a number of legislative proposals aimed at boosting job creation.

Christina Romer, chairwoman of the White House Council of Economic Advisers, said in an interview Wednesday that the White House was open to supporting new initiatives designed to help small businesses, provide direct payments to people who retrofit their homes to save energy, and further increase spending on infrastructure projects such as roads, bridges and public buildings.

Additional help to states to avoid layoffs of employees is under consideration, but no decisions have been made as to what the White House ultimately will support, and lots of negotiations with Congress remain.

Romer also said the White House supports extending jobless benefits for the long-term unemployed and subsidies for the unemployed to purchase health insurance.

At the same time, any new steps would have to have a relatively small deficit impact, Romer said. The administration says its budget for the upcoming fiscal year will take aggressive deficit-cutting steps.

"We've got these twin problems. We've clearly got a very severe jobs problem and we inherited a big budget deficit," Romer said. "There's going to be an emphasis that anything we do be done in a fiscally responsible way."

White House press secretary Robert Gibbs said Wednesday that Obama plans to give a speech next week that will lay out ideas, including some already under discussion by White House economic advisers and others that might arise out of the jobs summit. But both Gibbs and Democratic leaders in Congress caution that most new steps will have to wait until next year.

Romer sent some of the clearest signals to date that the White House could endorse moves by congressional Democrats to pass a bill or bills targeted to job creation. The White House has been mostly quiet on the topic in recent weeks, which has frustrated Democrats anxious to demonstrate better results on jobs.

Aid to small businesses could include tax incentives and unspecified steps to ease the availability of credit. Money for retrofitting homes with energy-saving windows might be patterned after the successful Cash for Clunkers program that boosted car sales this summer.

House Majority Leader Steny Hoyer, D-Md., said Tuesday that Democrats are going to work to extend unemployment benefits and health insurance subsidies before they begin to phase out Jan. 1. He also said Democrats are determined to increase infrastructure spending and are considering additional aid to states, a per-job tax credit and a public jobs program patterned after Depression-era programs.

The moves would come on top of the ongoing implementation of Obama's $787 billion economic stimulus measure, which is earning mixed reviews from voters and is attacked almost daily by Republicans.

Even the most ardent cheerleaders of the first stimulus round admit they wish it would have been more effective in creating jobs. Unemployment is topping 10 percent. About 3 million jobs have been lost since the bill passed in February as the economy has performed worse than most people expected.

But the White House _ generally backed up by a new study by the nonpartisan Congressional Budget Office _ argues that Obama's recovery plan has produced more than 1 million jobs that wouldn't exist if it had not passed.

The CBO study, for example, says the stimulus measure could have produced as many as 1.6 million jobs by the third quarter of this year. But on the other hand, the number of jobs generated could have been as few as 600,000. That would be more than $300,000 per job.

CBO also estimated that the stimulus measure made the economy grow by 1.2 percent to 3.2 percent and reduced unemployment by as little as 0.3 percent and as much as 0.9 percent.