Obama Issues Job Plan Analysis in Wake of Ugly December Figures
As if there wasn't already a wealth of bad news to be found about the current state of the U.S. economy, the most recent national employment numbers, released by the U.S. Department of Labor's Bureau of Labor Statistics, painted a picture of an ugly situation getting uglier as the unemployment rate jumped from 6.8% to 7.2% in the final month of 2008 and jobs fell by 524,000 over the same period. Over the entire year, the U.S. economy lost 2.6 million jobs, marking the country's worst year since 1945.
Having already discussed and announced his planned economic stimulus package, dubbed the American Recovery and Reinvestment Plan, President-elect Barack Obama, in response to the striking job figures and to the fact that his plan has already received early criticism from both Republicans and Democrats, released his team's economic analysis of the potential job benefits to be gained from the passage of the $775 billion bill now under discussion. According to the 14-page report, conducted by Christina Romer, chair-nominee-designate for Obama's Council of Economic Advisers, and Jared Bernstein, an official from the Office of Vice President-elect Joe Biden, swift passage of the plan "is expected to create between three and four million jobs by the end of 2010." It also extolled the virtues of direct increases in government purchasing, which, it claimed, had the potential to create more jobs than tax cuts, especially temporary ones, and fiscal relief to the states. "However, because there is a limit on how much government investment can be carried out efficiently in a short time frame, and because tax cuts and state relief can be implemented quickly, they are crucial elements of any package aimed at easing economic distress quickly," the report added.
The report also noted that certain industries such as construction and manufacturing are likely to experience especially strong job growth from a recovery package like Obama's that includes emphasis on infrastructure, energy and school repair. Additionally, more than 90% of the jobs the plan is expected to create are expected to come in the private sector.
Authors Romer and Bernstein cautioned, however, that, because of the hypothetical nature of the plan's implementation and the use of uncertain historical data, all of the report's estimates are subject to high margins of error. "Furthermore, the uncertainty is surely higher than normal now because the current recession is unusual both in its fundamental causes and its severity," they said. Additionally, the report offers little in the way of specific details about the construction of tax cuts and amounts allotted for states or public works projects, which have yet to be announced by the incoming administration.
A full copy of the report, as well as the President-elect's other comments on the plan, can be found on the transition team's website.
Jacob Barron, NACM staff writer