Friday January 9, 11:31 PM
Obama: US economy 'dire,' urges action on plan
WASHINGTON (AFP) - President-elect Barack Obama said Friday that staggering new job loss figures showed the need for Congress to urgently pass his plan to revive the "dire" and "deteriorating" US economy.
Obama showed signs of flexibility on the details of the plan and did not discount its price tag rising above its current 775 billion dollars, following complaints about its make-up from some of his fellow Democrats on Capitol Hill.
The president-elect spoke after Labor Department figures showed US employers shed 524,000 jobs in December, bringing yearly job losses to 2.6 million and pushing unemployment to a 16-year high of 7.2 percent.
The job slump over the course of 2008 was the most in a year since 1945.
"Clearly the situation is dire. It is deteriorating, and it demands urgent and immediate action," Obama said at a press conference.
"There are American dreams that are being deferred, and that are being denied because of the current economic climate."
"What we can't do is drag this out when we just saw half a million more jobs lost."
The president-elect spoke hours after a number of Democratic senators raised red flags about a 300 billion dollar tax cut plan included in the bill, and poured doubt whether a job creation tax credit for small business would work.
Obama however said "good progress" was being made on the stimulus package which is designed to create three million jobs and which he hopes to push through Congress within a month of his inauguration.
"I want this to work, this is not an intellectual exercise, and there's no pride of authorship," Obama said.
"If members of Congress have good ideas, if they can identify a project for me that will create jobs in an efficient way ... then I'm going accept it.
"If somebody has an idea for a tax cut that is better than a tax cut we've proposed, we will embrace it."
Obama has been careful not to put a final price tag on the stimulus plan, and has not discounted the notion it could rise in cost.
As well as the tax cut of 500 dollars for individuals and 1,000 for families, the stimulus plan includes a huge public works and infrastructure program which including road building projects and bridge repair.
Obama said Thursday in a major speech rolling out the project that it would also aim to ignite a flow of new "green jobs" including investments in alternative energy sources.
Several top senators on Thursday however called for an even greater emphasis on modernizing the creaking US electricity grid, and investment in new generation energy which could help slake the US thirst for foreign oil.
Top Obama economic aide Lawrence Summers and political strategist David Axelrod spent two hours briefing Democratic senators on the stimulus plan on Thursday and plan to go back on Sunday.
On Thursday, Senate Budget Committee chairman Kent Conrad questioned whether tax cuts as constituted in the Obama plan would deliver the best "bang for the buck."
"These marginal incentives are of marginal effectiveness," Conrad said.
Another Democrat, Senator Tom Harkin of Iowa, was also uneasy about the tax cut, saying it seemed to be another example of failed "trickle down" economics.
Republicans have warmly welcomed the tax cut element of the package, which was surprisingly large, but are raising doubts about its impact on the budget deficit which new figures show will soar to 1.2 trillion dollars this year.
Obama aides have dismissed the idea that the tax cut was inserted in the package to woo Republican votes, with the president-elect hoping for overwhelming majorities for his stimulus plan.
Democratic senator Barbara Boxer dismissed media interpretations that the Thursday meetings with Summers and Axelrod had been contentious.
"We're there not to just give each other hugs and congratulate each other ... we're there to take a look at where are some areas where we think this can be more effective.
"So please don't get the idea that there's -- there's some breakdown here," Boxer said.
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