By CityTownInfo.com Staff
October 6, 2009
Responding to widespread concern about growing unemployment, President Barack Obama is considering a number of steps aimed at providing some relief.
White House Press Secretary Robert Gibbs explained yesterday that while there "were no plans" for a second stimulus effort, the administration is looking at "extensions" of existing programs. "The economic team is certainly looking at and working on any way that we can create more jobs," said Gibbs, who was quoted in Bloomberg.com.
Despite some economists' assertions that the recession is easing, a report on Friday indicated that unemployment in September rose to 9.8 percent--a 26-year high. At the same time, the federal deficit has risen significantly because of this year's stimulus package and bailouts of the banking and auto industries, Fannie Mae and Freddie Mac. Nevertheless, Democrats are far more concerned about the growing unemployment rate.
It is "very important," said Mark Zandi, an economist who was quoted in The New York Times, for the government to "continue to provide significant support to the economy through next year." He predicted that the unemployment rate would peak at 10.5 percent next June.
Some steps being considered to provide relief include a renewal of a tax benefit for net operating losses that would benefit small businesses, and possibly giving employers a $3,000 tax credit for each new hire. A popular $8,000 tax credit for first-time homebuyers is also likely to be kept.
Officials also are considering an increase in infrastructure spending. "If there was to be another round of stimulus, additional infrastructure would be at the top of the list," explained Representative Chris Van Hollen of Maryland in Bloomberg.com. He noted that money for roads, transit and bridges would be a priority.
Yet the Times noted that it is far easier for Democrats to aid those who have lost their jobs than try to create new ones: They are considering, for example, extending unemployment assistance and food stamp benefits for those who are out of work for extended periods of time. In addition, they would also continue a subsidy for Cobra participants which allows purchasing health coverage under former employers' insurance plans. The unemployment and health benefits are otherwise to expire at the end of this year.
"There may not be anything we can do," said a Democratic Congressional leadership aide who was quoted anonymously in The Times. "Under any circumstances, it's going to take a while for jobs to recover."