WASHINGTON – President-elect Barack Obama has expanded his goals for a massive federal stimulus package to keep pace with the increasingly grim economic outlook, aiming to create or preserve at least 3 million jobs over the next two years.
The more aggressive target, up from 2.5 million jobs set a month ago, comes after a four-hour meeting last week where Obama’s top economic advisers told him the economy is now expected to lose as many as 3.5 million jobs over the next year. Obama was told that could drive unemployment, currently at 6.7 percent, above 9 percent, a figure not seen since the recession of the early 1980s.
With liberal and conservative economists calling on the government to spend $800 billion to $1.3 trillion to stanch the bleeding, the greater danger to the nation, Obama was told, lies in doing too little rather than too much.
Given that gloomy forecast, Obama last week presented congressional Democrats with a proposal to dedicate $675 billion to $775 billion over the next two years to middle-class tax cuts, aid to strapped state governments and investments in domestic priorities such as infrastructure, health care technology and education – a package designed to jolt the economy while deterring further layoffs and putting people back to work.
Congressional aides said they have talked with Obama’s team about tacking on initiatives that could drive the overall price tag as high as $850 billion, a figure more in line with economists’ recommendations. But with resistance expected from Senate Republicans and some fiscally conservative Democrats, an Obama adviser said the team has settled for now on $775 billion as the highest figure likely to win congressional approval and be ready for Obama’s signature soon after he takes office Jan. 20.
Lawrence Summers, the former Clinton administration Treasury secretary who has been tapped to serve as Obama’s top economic adviser in the White House, said in an interview that the numbers are likely to shift as the package takes shape before Congress commences Jan. 6.
“I don’t think you can regard this simply as a numbers game. It’s really going to depend upon the quality of the spending programs that we’re able to identify,” Summers said. “If we’re able to identify spending programs and effective tax measures that really can do the job, I think there would be a lot of receptiveness.”
As the recession has deepened, Obama’s proposal for economic stimulus has soared from $175 billion during the campaign to nearly $800 billion today.