Obama, Congress meet to discuss unemployment
President meets with Pelosi, Reid to plan job creation and new stimulus options
Don Lee - Tribune Washington Bureau
Issue date: 10/8/09 Section: World News
WASHINGTON (MCT) - With joblessness continuing to rise and the recovery in danger of losing steam, President Barack Obama met Wednesday with top congressional Democratic leaders to discuss new ways to boost the economy and create jobs.
But Obama and the Democrats are caught in a double bind: Having seriously underestimated the severity of the recession early this year - especially unemployment - they face difficult policy decisions about how best to ease the financial pain of millions of idled workers and assure that the recovery continues.
At the same time, they are under relentless attack from Republicans and other conservatives who argue that the $787 billion stimulus package approved last winter has sent the U.S. deficit soaring while failing to bring down unemployment.
That leaves the Obama administration with the sticky challenge of finding effective ways to buoy the economy without appearing to propose more "stimulus." Reflecting the political sensitivity of the issue, White House and congressional aides insisted Wednesday that another stimulus plan was not in the works.
Yet, administration policymakers and some outside economists are beginning to worry that the still-embryonic recovery could falter in coming months if no new action is taken. Not only is unemployment expected to rise and remain high or even rise well into next year, but consumer spending - a major engine of economic growth - remains anemic and most of the existing stimulus money will have been spent by early next year.
Although officials would not give specifics of Obama's 45-minute meeting with House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry Reid (D-Nev.), the White House has been looking at extending key elements of the original stimulus package, including expanded unemployment benefits and a tax credit for first-time home buyers.
Also under consideration are various ideas to spur job creation, including a proposal to offer tax credits to businesses that hire new workers or extend the hours of existing employees.
But Obama and the Democrats are caught in a double bind: Having seriously underestimated the severity of the recession early this year - especially unemployment - they face difficult policy decisions about how best to ease the financial pain of millions of idled workers and assure that the recovery continues.
At the same time, they are under relentless attack from Republicans and other conservatives who argue that the $787 billion stimulus package approved last winter has sent the U.S. deficit soaring while failing to bring down unemployment.
That leaves the Obama administration with the sticky challenge of finding effective ways to buoy the economy without appearing to propose more "stimulus." Reflecting the political sensitivity of the issue, White House and congressional aides insisted Wednesday that another stimulus plan was not in the works.
Yet, administration policymakers and some outside economists are beginning to worry that the still-embryonic recovery could falter in coming months if no new action is taken. Not only is unemployment expected to rise and remain high or even rise well into next year, but consumer spending - a major engine of economic growth - remains anemic and most of the existing stimulus money will have been spent by early next year.
Although officials would not give specifics of Obama's 45-minute meeting with House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry Reid (D-Nev.), the White House has been looking at extending key elements of the original stimulus package, including expanded unemployment benefits and a tax credit for first-time home buyers.
Also under consideration are various ideas to spur job creation, including a proposal to offer tax credits to businesses that hire new workers or extend the hours of existing employees.
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