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Obama Paints Grim Economic Picture


New unemployment numbers are out today, and they offer more evidence, if any were needed, of the troubled economy. The nation lost 524,000 jobs last month, sending the unemployment rate to 7.2 percent. The bleak employment picture is adding urgency to President-elect Barack Obama's call for a giant economic stimulus package. NPR's Scott Horsley reports.

SCOTT HORSLEY: President-elect Barack Obama says the nation is facing an economic crisis unlike most Americans have seen in their lifetimes. And he says, the situation has only gotten worse in the last few weeks.

(Soundbite of speech)

President-elect BARACK OBAMA: Many businesses cannot borrow or make payroll; many families cannot pay their bills or their mortgage; many workers are watching their lifesavings disappear; and many, many Americans are both anxious and uncertain of what the future will hold.

HORSLEY: All this week, Mr. Obama has been stressing the need for Congress to act quickly on an economic stimulus package. Yesterday, he warned that only the federal government has the wherewithal to reverse the economy's downward slide.

(Soundbite of speech)

President-elect OBAMA: I don't believe it's too late to change course, but it will be if we don't take dramatic action as soon as possible.

HORSLEY: Economists from across the political spectrum have endorsed the idea of a big government stimulus package, and many agree with Mr. Obama that it needs to come quickly. Nariman Behravesh, of the economic forecasting firm Global Insight, says if Congress acts quickly on a stimulus package, the economy could start growing again as early as this summer. Otherwise, Behravesh warns, the recession is likely to stretch into late this year or early next.

Dr. NARIMAN BEHRAVESH (Executive Vice President, Global Insight): The sooner they get this passed, the quicker they can get money into the pockets of households, businesses, and get started on some of the infrastructure spending they're thinking about. We don't have a lot of time; you know, the clock's ticking.

HORSLEY: The president-elect is proposing a mix of tax cuts and new government spending to help jumpstart the economy. He acknowledged the government has already spent hundreds of billions of dollars on bailout efforts without a noticeable improvement in the job market or confidence. He pledged that money spent in the stimulus would go for useful projects like new roads, high-speed Internet hookups and investments in clean energy.

(Soundbite of speech)

President-elect OBAMA: There is no doubt that the cost of this plan will be considerable. It will certainly add to the budget deficit in the short term. But equally certain are the consequences of doing too little or nothing at all, for that will lead to an even greater deficit of jobs, incomes and confidence in our economy.

HORSLEY: The federal government is already running on borrowed money, and it will have to borrow a lot more to pay for the stimulus package, estimated cost at least three-quarters of a trillion dollars. But even deficit watchdogs, like Robert Bixby of the Concord Coalition, seem willing to accept that for the time being.

Mr. ROBERT BIXBY (Executive Director, Concord Coalition): I think it's OK to do some short-term stimulus, and it may have to be rather substantial because we have a very large recession staring at us in the face. However, we have a huge unsustainable budget problem to begin with over the long-term, and we don't want to do anything in the short-term that's going to make that worse.

HORSLEY: Bixby says he's less concerned with the overall size of the stimulus package than how it's structured. A one-time investment in making homes or government buildings more energy efficient, for example, is easier for him to swallow than tax cuts or other programs that would be hard for the government to undo. Mr. Obama has been sensitive to that. All week, he's been coupling his message about the need for short-term spending to stimulate the economy with a promise to streamline government and cut the deficit in the long run.

(Soundbite of speech)

President-elect OBAMA: We cannot have a solid recovery if our people and our businesses don't have confidence that we're getting our fiscal house in order. And that's why our goal is not to create a slew of new government programs, but a foundation for long-term economic growth.

HORSLEY: Mr. Obama has also promised that the stimulus package would be closely monitored, with an oversight board and an online database, so taxpayers can see how the money's being spent. Scott Horsley, NPR News, Washington.

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SHAPIRO: You're listening to Morning Edition from NPR News. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.
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