By Michael A. Fletcher and Neil Irwin
Washington Post Staff Writers
Friday, November 13, 2009
President Obama plans to hold a White House forum on job creation next month, an attempt to signal his concern about the growing ranks of the unemployed and build consensus on future action to stoke the economy.
The summit will bring together small-business owners, corporate executives, economists, financial experts and union leaders to discuss ideas for accelerating job creation during the worst labor market conditions in a generation, Obama said Thursday.
"We all know there are limits to what government can and should do even during such difficult times," Obama said at the White House before leaving on a nine-day trip to Asia. "But we have an obligation to consider every additional, responsible step that we can to encourage and accelerate job creation in this country."
Obama's plan for a jobs summit was seen by some analysts as an effort to blunt the growing political threat posed by high unemployment rates. But it was greeted with enthusiasm by economists who have been agitating for the administration to take more aggressive action to stem job losses.
"I think there is an incredibly compelling economic, moral and political case for a major jobs initiative," said Lawrence Mishel, president of the Economic Policy Institute, a liberal research center. "I am glad the administration is now visibly acknowledging that. I think it is very encouraging."
Obama's announcement came less than a week after the nation's jobless rate hit 10.2 percent, the highest level since 1983. Surging unemployment has led many economists to conclude that the apparent economic recovery might not trickle down to the 15.7 million jobless Americans until well into next year.
Speaking in the White House Diplomatic Reception Room, Obama credited his administration's policies with reversing the steepest economic slide the nation has experienced since the Great Depression.
But while Obama has presided over a stock market rebound and a restoration of economic growth, he has yet to halt the slide in jobs. Since the recession began in December 2007, employers have slashed more than 8 million jobs. The president called the problem "one of the great challenges that remains in our economy."
White House aides said no date has been set for the summit.
Since taking office 10 months ago, Obama has hosted White House forums on health care, economic stimulus and fiscal responsibility. He also has convened a group of outside economic advisers who are working on ideas to create jobs and to revamp the nation's tax code.
"Holding these summits is particularly tempting when there is relatively little of a substantive nature that a president can do about a particular problem," said Bruce Buchanan, a presidential scholar at the University of Texas. "One of the ways you take the pressure off is to have a high-profile demonstration of the president's concern."
Job losses are also a looming political concern for Obama and his party. Democrats lost gubernatorial races in Virginia and New Jersey this month, in part because the voters most concerned about the economy and jobs leaned heavily Republican, according to exit polls. A year earlier, a large majority of voters harboring those concerns had cast ballots for Obama.
Congressional Democrats have been pressing the White House to do more to create jobs. But hemmed in by exploding budget deficits and criticism from Republicans that the $787 billion economic stimulus plan enacted in February has been ineffective, the White House has been reluctant to embrace any sweeping new initiatives.
In recent weeks, Obama has taken smaller steps to continue stimulating the economy. Last Friday, the president signed legislation that extends unemployment insurance benefits by up to 20 weeks and renews an $8,000 tax credit for first-time home buyers while expanding eligibility. Earlier, the administration backed a $250 payment to senior citizens as a means of stimulating economic activity.
Obama himself tamped down expectations for the upcoming White House meeting, saying that though he wants to hear new ideas for creating jobs, it is "important we don't make any ill-considered decisions even with the best of intentions, particularly at a time when our resources are so limited."
The economy began to expand over the summer, with gross domestic product growing at a 3.5 percent annual rate in the third quarter. But employers have so far been able to increase their output without adding jobs.
It is common for an improvement in joblessness to lag behind a turnaround in the overall economy, but just how long unemployment will lag behind is a crucial question for the Obama administration. The last recession technically ended in November 2001, but there was no sustained job growth until 2003.
There was one piece of good news on the job front Thursday, as the Labor Department said 502,000 people filed new applications for unemployment insurance benefits last week, the smallest increase since January. But that is still very high by any historical standard and the numbers have come down excruciatingly slowly.
Rather than offering a short-term fix for joblessness, the White House says it has been focused on a difficult, longer-term strategy for improving the nation's job market.
The administration has backed huge investments in the renewable-energy industry and education workers as part of the plan to wean the nation from the debt-driven consumer economy that fueled growth in the recent past.
It is an approach Obama said he would promote when he meets with other world leaders during his visit to Asia. The strategy, he said, is "one in which prosperity around the world is no longer as dependent on American consumption and borrowing, but more on American innovation and products."