President Obama’s chief economic advisers say putting Americans back to work is the first order of business. Only then can they start tackling the soaring federal debt.
Christina Romer, chairwoman of the White House Council of Economic Advisers, said she would not consider the recession truly at an end until employment returned to levels last seen at the end of 2007 when the recession began.
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Her view was 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 joblessness 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-entered 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 that unexpectedly is available 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.
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 were likely to vote Sunday on a huge end-of-year $1.1 trillion spending bill that gives budget increases far exceeding inflation to much of the government.
Summers appeared on ABC’s “This Week” and CNN’s “State of the Union,” while Romer was on NBC’s “Meet the Press.”
