Obama says plan would bring 3 million new jobs

Facing increased skepticism from both parties about the details of his economic stimulus proposal, President-elect Barack Obama and his team Saturday laid out new claims regarding the $775-billion package, saying that 90% of the jobs produced would be in the private sector, including hundreds of thousands in construction and manufacturing.

Obama used his weekly radio address to continue his pre-inaugural campaign to build momentum for passage of the stimulus package, saying, “The jobs we create will be in businesses large and small across a wide range of industries. And they’ll be the kind of jobs that don’t just put people to work in the short term, but position our economy to lead the world in the long term.”

To buttress Obama’s points, two of his top economic advisors released an analysis of the president-elect’s plan Saturday. The report carried the grim prediction that though millions of jobs would be created or saved through the stimulus package, the unemployment rate would be little improved by the end of 2010 from the 7.2% reached last month -- the nation’s highest rate since January 1993.

The advisors also warned that, without passage of the stimulus plan, unemployment could reach 9%.

Obama’s speech came as members of Congress, particularly Democrats, had begun attacking some aspects of the still-unfinished proposal. Democrats object to a proposed $3,000 tax credit to corporations for each job they create or save, saying the credit would be ripe for abuse and difficult to administer. Republicans have questioned the total size of the package and the hundreds of billions of dollars that could go to state governments.

Many of the ideas the Democratic critics object to, such as the corporate tax credit, are popular among Republicans, complicating Obama’s desire to get bipartisan approval of the stimulus package.

The report from Obama economic advisors Jared Bernstein and Christina Romer offered defenses against some of the criticism from lawmakers.

It acknowledged that tax cuts were “likely to create fewer jobs than direct increases in government purchases,” but the economists said there was a limit to how much government investment could be done over the two-year time frame of the stimulus package.

Republicans have been wary of the potential for government payrolls to balloon, but the Obama aides wrote that less than 10% of the jobs created under the stimulus plan would be government positions.

Obama aides said the stimulus plan would create millions of jobs while preventing further layoffs, particularly in state government.

They estimated 137.6 million Americans would be employed at the end of 2010 if the stimulus passed, 2 million more than the current employment of 135.5 million.

Without the stimulus, the aides predicted, about 133.9 million people will be employed -- leading the aides to conclude the plan could create or save nearly 4 million jobs.

“It should be noted that all of the estimates presented in this memo are subject to significant margins of error,” the pair wrote, adding: “The current recession is unusual both in its fundamental causes and its severity.”