Urgent Calls For A New Stimulus Package
SCOTT SIMON, host:
NPR's Jeff Brady now reports that bad news in the U.S. auto industry and the unemployment rate sharpened calls for President-elect Obama and others for a new economic stimulus package.
JEFF BRADY: Given that Barack Obama is set to become president during the worst financial crisis since the Great Depression in the 1930s, it's no surprise that his first press conference focused primarily on the economy.
(Soundbite of press conference)
President-elect BARACK OBAMA: I want to see a stimulus package sooner rather than later. If it does not get done in the lame-duck session, it will be the first thing I get done as president of the United States.
BRADY: Yesterday and throughout his campaign, Senator Obama expressed a preference for focusing help on those in the lower- and middle-income brackets.
President-elect OBAMA: The goal of my plan is to provide tax relief to families that are struggling, but also to boost the capacity of the economy to grow from the bottom up.
BRADY: But Senator Obama made it clear yesterday that this is just his plan, and he may tweak some of it, including the part that increases taxes on the wealthy if he thinks that might hurt the economy. He also encouraged the Bush administration to speed implementation of a $25 billion loan program for the hobbled U.S. auto industry.
Another proposal he talked about briefly on Friday involves spending $50 billion to help state and local governments avoid layoffs and finish infrastructure projects. Economist Rebecca Blank with the Brookings Institution says typically, such spending takes too long to put in place to fix an already struggling economy, but she says this recession may be different.
Ms. REBECCA BLANK (Economist, Brookings Institution): In part, a whole number of states have pent-up projects, if you will, planned projects that are ready to launch, that they've actually delayed, and this additional money will let them start it immediately. There's also - this is not good news - a fear there's going to be a long-enough recession that even if it takes some time for this money to come online, it will still be helpful when it does.
BRADY: Putting folks to work on such projects would surely help; 1.2 million jobs have disappeared this year, half of them in just the last three months. Most of the losses were in construction and manufacturing. Rebecca Blank suspects unemployment numbers will get worse in coming months before they get better. Jeff Brady, NPR News, Washington.