Surging U.S. Unemployment Rate Puts Pressure on Obama

By Bob Willis | Bloomberg.com

The jump in the U.S. unemployment rate to the highest level in a quarter century last month suggests the recession is deeper than the Obama administration forecasts and additional measures may be needed to restart growth.

The jobless rate rose to 8.1 percent in February as employers reduced payrolls by 651,000, the Labor Department said yesterday in Washington. Losses have now exceeded 600,000 for three straight months, the first time that’s happened since collection of the data began in 1939.

Unemployment has already reached the average rate the White House projected for the whole year. The administration needs to keep its focus on repairing the banking system and implementing the stimulus rather than get diverted by other goals such as healthcare changes, said John Ryding, chief economist at RDQ Economics LLC in New York.

“They should be focused on stabilization” of financial firms “and stimulus — and that should not only be ‘Job one,’ that should be the only job right now,” Ryding said in an interview with Bloomberg Television. “The question is, is it recession or is it something worse than recession?”

U.S. stocks posted the biggest weekly decline in three months after American International Group Inc. reported a $61.7 billion loss and billionaire investor Warren Buffett said the economy is in “shambles.” …

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Opinion from News Donkey: Obama recently held a White House summit to facilitate progress on the important issue of health care. An underlying pillar of health care is the economy, which is in a state of major distress that is only going to get worse unless Geithner and the US Treasury Department take swift action. However, Geithner is virtually working alone right now. For a nation with the extensive resources of the United States, we really ought to be able to do better than this. Obama may want to hold a summit to facilitate vetting and confirmation for all the Treasury Department positions. It is alarming that of 15 key positions only one has been filled, despite the fact that it has been over four months since the presidential election. One might have thought priority attention would have been given by Obama’s transition team to staffing for the Treasury. Past administrations may not have filled positions for the Treasury any faster, but then they did not face such huge economic challenges either. Health care is an important issue, but the economy is truly an emergency and needs to be more than just a high priority issue along side other issues. Fielding an incomplete team to tackle our huge economic problems is not putting forth our best foot. Washington needs to spend less time worrying about distractions like Rush Limbaugh and instead work non-stop on solving our economic problems.

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Timothy Geithner, Alone and Working Night and Day

FACT CHECK: GOP Adrift on Small Business Claim

By CALVIN WOODWARD | Associated Press

WASHINGTON – Claims that President Barack Obama’s tax plans are an assault on small business skirt the likelihood that most job-producing small businesses wouldn’t feel that pinch at all.

Obama is proposing to raise taxes on households earning over $250,000 by increasing the rate on the top two tax brackets and limiting deductions, starting in 2011.

Republicans and other critics, knowing they will get little mileage from defending the rich, instead are casting the plan as a tax hit on people who run industrious little companies driving job growth.

That’s not likely, according to one in-depth analysis, which found that more than 95 percent of small business owners would be off the hook.

Obama does not propose higher business taxes.

But critics reason that owners of many small companies report business income on their personal tax returns instead of filing corporate taxes. That exposes their business’s earnings to Obama’s higher tax rates on the wealthy.

To be sure, some business owners would get caught in that net …

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More Fact-Checking of Obama’s Speech

The president gets facts wrong about oil imports, mortgage aid and the transcontinental railroad, and more.

FactCheck.org

President Obama’s first speech to a joint session of Congress was stuffed with signals about the new direction his budget will take and meant-to-be reassuring words about the economy. But it was also peppered with exaggerations and factual misstatements.

He said “we import more oil today than ever before.” That’s untrue. Imports peaked in 2005 and are substantially lower today.

He claimed his mortgage aid plan would help “responsible” buyers but not those who borrowed beyond their means. But even prominent defenders of the program including Fed Chairman Bernanke and FDIC chief Bair concede foolish borrowers will be aided, too.

He said the high cost of health care “causes a bankruptcy in America every 30 seconds.” That’s at least double the true figure.

He flubbed two facts about American history. The U.S. did not invent the automobile, and the transcontinental railroad was not completed until years after the Civil War, not during it.

He claimed that his stimulus plan “prevented the layoffs” of 57 police officers in Minneapolis. In fact, it’s far more complicated than that, and other factors are also helping to save police jobs.

The president also repeated some strained claims we’ve critiqued before …

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Related News: FACT CHECK: Obama’s Words on Home Aid Ring Hollow

Breaking it Down: Obama 2010 Budget Highlights by Agency

By The Associated Press

Available details of President Barack Obama’s proposed government spending for the 2010 budget year that begins on Oct. 1. A more extensive budget outline is expected in April. In most cases, the figures are for discretionary spending and do not include mandatory entitlement programs like Social Security. The percentage change is based on what Obama wants to spend next year compared with what he anticipates the government will spend in 2009 once Congress completes appropriations for this year.

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Health budget aims toward universal coverage

Agency: Health and Human Services

2010 proposal: $821.7 billion ($78.7 billion for discretionary spending, plus $453 billion for Medicare and $290 billion for Medicaid)

Change from 2009 estimate: 7.5 percent increase

Highlights: The government’s gargantuan health insurance programs for the elderly and poor would grow more slowly under Obama’s proposed health care budget …

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FACT CHECK: Obama’s Words on Home Aid Ring Hollow

By CALVIN WOODWARD and JIM KUHNHENN | Associated Press

WASHINGTON – President Barack Obama knows Americans are unhappy that their taxes will be used to rescue people who bought mansions beyond their means.

But his assurance Tuesday night that only the deserving will get help rang hollow.

Even officials in his administration, many supporters of the plan in Congress and the Federal Reserve chairman expect some of that money will go to people who used lousy judgment.

The president skipped over several complex economic circumstances in his speech to Congress — and may have started an international debate among trivia lovers and auto buffs over what country invented the car.

A look at some of his assertions:

OBAMA: “We have launched a housing plan that will help responsible families facing the threat of foreclosure lower their monthly payments and refinance their mortgages. It’s a plan that won’t help speculators or that neighbor down the street who bought a house he could never hope to afford, but it will help millions of Americans who are struggling with declining home values.”

THE FACTS: If the administration has come up with a way to ensure money only goes to those who got in honest trouble, it hasn’t said so …

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Obama Signs Stimulus Bill, Readies Homeowner Plan

By LIZ SIDOTI and TOM RAUM | Associated Press

DENVER – President Barack Obama put his own indelible imprint on the nation’s distressed economy Tuesday, signing the huge recovery package into law, readying a $50 billion proposal to help homeowners fend off foreclosure and awaiting emergency restructuring plans from flailing automakers. Obama said the sprawling legislation, which congressional Democrats pushed to passage last week over near-unanimous opposition from Republicans, would “set our economy on a firmer foundation.”

Obama’s first major piece of legislation, it’s a $787 billion mix of tax cuts and one of the biggest public spending programs since World War II.

“I don’t want to pretend that today marks the end of our economic problems. Nor does it constitute all of what we have to do to turn our economy around. But today does mark the beginning of the end, the beginning of what we need to do to create jobs for Americans scrambling in the wake of layoffs,” Obama said …

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How the Economic Stimulus Plan Could Affect You

By The Associated Press An examination of how the economic stimulus plan will affect Americans. Taxes: The recovery package has tax breaks for families that send a child to college, purchase a new car, buy a first home or make the ones they own more energy efficient. Millions of workers can expect to see about $13 extra in their weekly paychecks, starting around June, from a new $400 tax credit to be doled out through the rest of the year. Couples would get up to $800. In 2010, the credit would be about $7.70 a week, if it is spread over the entire year. The $1,000 child tax credit would be extended to more low-income families that don’t make enough money to pay income taxes, and poor families with three or more children will get an expanded Earned Income Tax Credit … Continue Reading

Stimulus: How to Know If It’s Working

Consumer confidence and job creation may be slow to emerge and hard to measure, but boosts in umemployment benefits and food stamps will be fast acting

By Moira Herbst | BusinessWeek

At his first prime-time press conference, President Obama was asked a central question about the $800 billion-plus economic stimulus package: How will Americans know if it’s working? “My initial measure of success is creating or saving 4 million jobs,” Obama answered.

That was on Feb. 9, a day before the Senate passed an $838 billion version of the bill by a vote of 61-37, following the Jan. 28 passage of an $819 billion version in the House. The House and Senate have begun negotiations to reconcile the measures, which Obama would like to sign into law by Feb. 16, the federal Presidents’ Day holiday. When people have a job, Obama explained, they purchase and invest, allowing companies to do the same and, in turn, to hire more workers as business expands.

Indicators of Success

Yet while job creation is arguably the most important goal of the stimulus package, other parts of the bill will have a much more immediate and visible impact …

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U.S. Jobless Rate Soars as Payrolls Plunge by 598,000

By Shobhana Chandra | Bloomberg.com

Feb. 6 (Bloomberg) — The unemployment rate in the U.S. climbed to the highest level since 1992 in January and payrolls tumbled as the recession showed no sign of abating.

The jobless rate rose to 7.6 percent from 7.2 percent in December, the Labor Department said today in Washington. Payrolls fell by 598,000, the biggest monthly decline since December 1974, after dropping by 577,000 in the previous month.

“We are in the middle of a very severe, a violent, collapse in activity and it could go on for months,” James Galbraith, an economics professor at the University of Texas in Austin, said in an interview with Bloomberg Television. The report will likely diminish objections “that somehow the president’s recovery plan is too large and should be trimmed back.” …

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Will Tax Breaks in Stimulus Bill Save Jobs? No One Knows

By Kevin G. Hall | McClatchy Newspapers

WASHINGTON — Tax provisions in the economic stimulus legislation introduced Monday on the Senate floor would cut Treasury revenues by at least $350 billion in a bid to spark economic activity. Tax experts say the legislation would achieve that goal, but there’s plenty of room for improvement.

The nearly $900 billion plan includes tax cuts and credits as well as a wide range of spending on infrastructure, aid to states, energy, environment and much more — all designed to prevent the economy from sinking further.

Many Americans swoon at the high price tag and ask a simple question: How will we know it works?

There’s no single answer. The Obama administration has said it will use employment as a metric, expecting the stimulus effort to create or save between 3 million and 4 million jobs. However, proving that jobs have been saved that otherwise would’ve been lost is more art that science.

Another way to measure success is to gauge whether the plan spurs demand for goods and services. If it boosts demand for things that U.S. companies make or sell, more workers will be needed to make, ship and sell the goods and services …

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