Wall Street Journal / WASHINGTON -- Facing growing criticism of his economic recovery plan, President-elect Barack Obama made public Saturday a detailed analysis by his economic advisers that estimates the $775 billion plan of tax cuts and new spending would create 3.5 million jobs over the next two years.
With an eye on Mr. Obama having immediate access to bailout money already approved by Congress when he becomes president, his economic team and the Bush administration have discussed having Treasury Secretary Henry Paulson ask lawmakers for access to the $350 billion remaining in the fund.
White House spokeswoman Dana Perino said the administration hasn't decided whether to make such a request, which would be made within the next week. Under the terms of the legislation creating the fund, Congress would have 15 days to reject the request.
The Obama transition team also has asked Neel Kashkari, the head of the rescue program at the Treasury Department, to remain in that position for a short time after the inauguration to help assure a smooth transition, according to an Obama official.
The 14-page analysis of Mr. Obama's $775 billion plan, which was posted on the Internet, concedes that the estimates are "subject to significant margins of error," both because of the assumptions that went into their economic models and because no one knows the final outlines of the package that will emerge from Congress.
"These numbers are a stark reminder that we simply cannot continue on our current path," Mr. Obama said in his weekly radio and YouTube broadcast address.
"If nothing is done, economists from across the spectrum tell us that this recession could linger for years and the unemployment rate could reach double digits -- and they warn that our nation could lose the competitive edge that has served as a foundation for our strength and standing in the world," he said.
Mr. Obama, who previously has provided few details of the massive spending and tax cut plan, released the report one day after the unemployment rate jumped to 7.2 percent, the highest in 16 years. The nation lost 524,000 jobs in December, bringing the total job loss for last year to 2.6 million, the largest since World War II.
If Congress fails to enact a big economic stimulus plan, Mr. Obama's advisers estimated that another 3 million to 4 million jobs will disappear before the recession ends.
As lawmaker criticisms of parts of his plan grew during the week, Mr. Obama agreed Friday to modest changes in his proposed tax cuts. Democratic congressional officials said his aides came under pressure in closed-door talks to jettison or significantly alter a proposed tax credit for creating jobs, and to include relief for upper middle-class families hit by the alternative minimum tax.
The new report is likely to intensify debate over the economic recovery plan even more, as economists outside the Obama team begin delving into the analysis. The report, for example, estimates that the unemployment rate at the end of 2010 would be 1.8 percentage points lower if the plan is enacted.
Top Democrats on Capitol Hill say there is far more agreement than disagreement on the major parts of the recovery plan: aid to cash-strapped state governments, $500-$1,000 tax cuts for most workers and working couples, and a huge spending package blending old fashioned public works projects with aid to the poor and unemployed and a variety of other initiatives.
The new report provides detailed breakdowns of how many jobs each part of the plan would create, even going so far as to provide estimates that more than 40% of the new jobs would go to women and that 90% of them would be created in the private sector. It also provides estimates of how many new jobs would be created in each different sector of the economy.
"It's not too late to change course -- but only if we take immediate and dramatic action," Mr. Obama said. "Our first job is to put people back to work and get our economy working again."
Comments: Everyone can get access to the detail analysis by Obama's proposed job plan. While many will be pondering on the details, one should not miss the strategic move by Obama. Its quite brilliant really. Knowing full well that the Republicans will make it tough on Obama to pass his plan, by making the plan public, the pressure will be back on the Republicans. Not many will now want to openly oppose the plan or shrink it. The key phrases "3.5m jobs" will stick in the public's minds. The report is 14 pages long and the brilliant strategic move by Obama's team to reveal it to the public will go a long way to ensuring a smoother passage. The equity markets are now riding on the plan. The sooner it is approved and implemented, the better.
p/s photo: Fiona Xie