A month away from becoming the nation’s 44th President and the first Black American to serve in the White House, Barack Obama raised the stakes of his economic recovery package, increasing the goal for job creation from 2.5 to 3 million over two years. It is probably the clearest signal yet that the incoming administration is feeling pressure as the country’s economic picture worsens. The President-elect revised his numbers after meetings last week in which he was told by his top economic advisers that the economy may shed as many as 3.5 million jobs over the next year and that unemployment could rise above 9 percent.
Sensing the seismic jolt the nation would experience if those predictions hold up, Mr. Obama is seeking to put forth an economic recovery plan now expected to come in at about $775 billion but may approach $1 trillion by the time all details are hashed out. Many economists, from the political left and right, have been advocating for such a large investment to stop the hemorrhaging of the economy. In fact, there appears to be a growing chorus for the new administration to act in a bold way to head off economic disaster. The decision earlier by the Bush administration to provide assistance to the auto industry was a precursor to the move by President-elect Obama to act decisively against the tide of bad economic news.
All of these maneuvers are taking place while the sting of the current downturn is particularly taking a toll upon Black Americans. Last month the economy shed 533,000 jobs and unemployment stood at 6.7 percent. November’s large decline was preceded by losses of 403,000 in September and 320,000 in October. The overall numbers for November were bad but far worse were the numbers for Black Americans, with unemployment at 11.2 percent; 11.9 percent for Black men and Black teenagers at 32.3 percent. Black women fared somewhat better but their unemployment rate was still 9 percent. The unemployment numbers for December, scheduled to be released on January 9, could rival November, and if so, would signal that the economy, as predicted, may not recover until early 2010.
The package the incoming administration is said to be considering includes tax cuts for the middle class, an extension of unemployment benefits for the unemployed, aid to state governments that are facing huge budget deficits and investments in critical domestic priorities such as transportation infrastructure, health care technology and education. The package is meant to provide a quick infusion of cash into the economy, create new jobs and stop the wave of layoffs that have been taking place across industries. If passed, and it is expected that the Congress would pass and the new President would sign the measure shortly after taking office, it would be the most expensive measure ever approved on Capitol Hill.
Over the last week President-elect Obama’s transition team has been meeting with policy professionals and service providers to gather recommendations for specific programmatic elements to include in the recovery package, while his economic advisers have been busy analyzing forecasts and trying to determine the appropriate breadth of the recovery package. By all indications the details of the package may be worked out as soon as this week but then Democrats on the Hill will have to turn to their Republican colleagues to build a bipartisan consensus on the merits of the package. For certain the package is expected to be ready for introduction in Congress once the House and Senate convenes in January, and acted upon quickly so it will be ready for Mr. Obama’s signature shortly after he is inaugurated on January 20.