October 9, 2009 in Nation/World

Calls grow for more relief

Obama faces pressure from Democrats seeking new round of stimulus efforts
Neil Irwin, Lori Montgomery And Michael A. Fletcher Washington Post
 
Associated Press photo

South Florida Workforce mobile specialist Roberto Villacreses helps Vaxine Borgella, 25, look for a job Thursday in Miami. Republicans have criticized the Obama administration for continuing job market woes.
(Full-size photo)

Help for jobless

The House has voted to extend jobless benefits, and the Senate may do so next week. A deal reached Thursday by Senate Democrats would extend benefits to rearly 2 million people in danger of running out of assistance.

WASHINGTON – Eight months after enacting a massive economic stimulus package, the Obama administration is facing rising pressure from some congressional Democrats to move more aggressively to jump-start the moribund job market and try to spur a housing recovery.

For the legislators, the imperative is clear: to get the job market back on track before midterm congressional elections in November 2010. While mainstream economists credit the $787 billion stimulus package passed in February for helping stabilize the economy, the unemployment rate reached 9.8 percent in September and is widely forecast to keep rising in the coming months.

But the White House, which is juggling priorities – including a health care overhaul, big changes to financial regulation and a proposal to combat global warming – is reluctant to take on another sweeping legislative task. And in a time of large budget deficits, Obama administration officials are particularly eager not to do anything that would be characterized as another stimulus act or tagged as wasteful spending.

Many Democrats – especially in the House – favor moving swiftly to bolster the job market after they pass health care legislation.

The House has already voted to extend unemployment benefits, and the Senate may do so next week.

Senate Democrats said Thursday they have reached a deal to extend unemployment insurance benefits to the nearly 2 million jobless workers across the country who are in danger of running out of assistance by the end of the year.

The agreement would give an additional 14 weeks of benefits to jobless workers in all 50 states. Workers in states with an unemployment rate at 8.5 percent or above, including Washington and Idaho, would receive six weeks on top of that.

Support is already building around a plan to extend an $8,000 tax credit for first-time homebuyers, which was included in the first stimulus package but is slated to expire Nov. 30. And lawmakers are discussing a wide range of other ideas, including a tax credit for businesses that create jobs, additional tax incentives for businesses to invest in equipment, and a large package of new transportation projects.

“There are some initiatives that we must do,” particularly extending unemployment insurance, House Speaker Nancy Pelosi, D-Calif., told reporters Thursday. “What is it that we can afford? What works the fastest? We have to get those judgments.”

Pelosi also said that extending the first-time homebuyer tax credit is “under consideration,” as is whether to extend such a credit to other homebuyers.

The White House is moving cautiously, weighing proposals from Capitol Hill and beyond but disinclined to combine them into one sweeping, potentially expensive bill that would draw fire from Republicans, according to administration officials. Rather, the administration wants to enact some policies through the regular budget process and avoid those that do not directly support the job market.

“It is a real balancing act between worrying about the job problem and making sure you are squeezing every job you can out of every dollar that is spent,” said an administration official who spoke on the condition of anonymity to discuss ongoing deliberations. Administration officials said no decisions are imminent on what ideas Obama will endorse.

Republicans, who have pilloried the administration for ongoing job-market woes despite the previous stimulus package, argued that any new stimulus package should focus on tax cuts.

“I think everyone knows that American families and small businesses continue to struggle,” said House Minority Leader John Boehner, R-Ohio. “These high unemployment rates are not coming down. The stimulus is not working. And some of the policies that are continuing to be promoted here are not going to help the situation; they are going to make it worse.”

The Associated Press contributed to this report.


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