Obama ups the ante on economic stimulus plan
New warnings about the economy prompt his team to more than triple the cost of the plan in an effort to create or save more jobs.
Reporting from Washington — Warned that the economy may get considerably worse, President-elect Barack Obama has more than tripled the size of the economic stimulus package he embraced during the campaign and is aiming to create or save 3 million jobs, up from 2.5 million, transition officials said Saturday.
Obama's team is crafting a massive new economic stimulus package to reach his revised job goal. Though the president-elect has declined to specify the amount, transition aides told Capitol Hill staff last week that the plan may cost $675 billion to $775 billion over two years.
Those numbers far exceed the more modest stimulus package Obama laid out during the campaign, underscoring a growing worry that the economy is in a tailspin. As recently as mid-October, Obama was touting a stimulus of about $175 billion.
Summarizing the incoming administration's view, Vice President-elect Joe Biden said in an interview with ABC's George Stephanopoulos to air today that the economy is at risk of "absolutely tanking."
Obama met privately with top economic advisors Tuesday and received a sobering briefing. Aides cautioned that without an aggressive recovery plan, the economy could lose as many as 4 million jobs through 2011 and the national unemployment rate could rise above 9%. Unemployment last month reached 6.7%, the highest level in 15 years. The last time the jobless rate topped 9% was in 1983, during President Reagan's first term.
Christina D. Romer, incoming chairwoman of the Council of Economic Advisors and an expert on the Great Depression, told Obama that forecasts over the short and long term had darkened in recent weeks and that looming economic troubles eclipsed anything seen in the last 50 years, transition officials said.
Confronted with that prospect, Obama said the job creation figure he announced in his weekly radio address last month -- 2.5 million -- would not be enough to avert disaster. He called for creating or preserving an additional 500,000 jobs over the next two years.
Since his election, Obama has heard nothing but dire reports about the economy he's about to inherit. In November, employers eliminated 533,000 jobs, the most since 1974.
His call for a more ambitious plan to create and retain jobs may involve a bit of psychology.
