US President-elect Barack Obama and his team are working on a second economic stimulus package that could reach $850 billion. With the US unemployment rate spiralling, Obama has raised his ambitious job-creation target to three million.
AFP - President-elect Barack Obama has boosted plans to kickstart the ailing US economy with an ambitious goal to create three million jobs and unveiled Sunday a task force to protect working families.
Several Obama advisors told US media that after a four-hour meeting last week with his economic advisors, Obama added another 500,000 jobs to his plan announced a month ago to create 2.5 million jobs over the next two years.
Faced with fears the United States will now shed some 3.5 million jobs in 2009, driving unemployment rates up from 6.7 percent to above nine percent, Obama decided on a more aggressive strategy, the Washington Post reported.
He plans to hit the ground running when he takes office on January 20, with his economic team already drawing up a huge stimulus package to bring before Congress.
According to US media, Obama's team is looking to craft a package worth between 675 and 775 billion dollars over two years, but it could swell to 850 billion as it moves through the legislative process. Some news reports have predicted it may even top a trillion dollars.
The US economy has been the foremost concern of Americans for months, as it continues to nosedive despite a 700-billion-dollar Wall Street rescue plan agreed in October.
Vice president-elect Joseph Biden Sunday would not be drawn on precise figures of a second stimulus package.
"What we're doing is putting together what we think will be the economic package that will do two things. One, stem the hemorrhaging of the loss of jobs, and begin to create new jobs," Biden told ABC's This Week.
"At the same time, we provide continuing liquidity for the financial markets."
But he admitted that since the Democratic team's victory in the November 4 election, the economy has turned out to be in much worse shape than previously thought.
"Every economist that I've spoken to ... from well-known economists on the right, conservative economists, to economists on the left, and everyone in between, says the scope of this package has to be bold; it has to be big.
"There's going to be real significant investment, whether it's 600 billion dollars or more or 700 billion dollars. The clear notion is, it's a number no one thought about a year ago," Biden said.
He also revealed that he had agreed to chair a special White House task force that would come into effect on January 20 to help boost middle-class and working families who have seen a steady erosion of living standards.
Rising unemployment, falling property prices and a credit crunch have squeezed middle-class families, who saw real incomes fall even before the US entered the current recession, economists say.
The task force, bringing together Obama administration policy makers, would be "designed to do the one thing we use as a yardstick of economic success of our administration: is the middle class growing?" Biden said.
It will issue annual reports on its findings and recommendations that would be posted online, in what the Obama team hopes will be a two-way dialogue.
"My administration will be absolutely committed to the future of America’s middle-class and working families," said a statement by Obama, who is on holiday in Hawaii with his family and spent the day golfing and exercising.
"They will be front and center every day in our work in the White House."
The president-elect has so far refused to reveal the size of the economic stimulus package which remains under wraps, but he has said he wants to pump money into "shovel ready" infrastructure projects to create jobs.
But Republican congressman Eric Cantor voiced concerns about where the money was going to come from if Obama keeps his pledge to not raise taxes.
"I think most American taxpayers now are sort of scratching their head, wondering when all this bailout stuff is going to end," Cantor told CNN's Late Edition.
"I think we have to sort of take that into consideration and take the fact that we really need to protect the taxpayers."
Former Hewlett-Packard CEO Carly Fiorina warned Obama must not forget the role of small businesses in helping to stimulate the economy.
"Today, small business is the engine of job creation in this country ... We need to do things that make it easier for small businesses to hire and grow, make it easier for consumers to purchase."
Date created : 2008-12-22