US economy ‘dire’ but progress on stimulus plan

WASHINGTON - US economic conditions are ”dire” and “deteriorating,” president-elect Barack Obama warned Friday after the release of new job-loss data, but said lawmakers had made progress on a huge stimulus package to jumpstart the economy.

By (AFP)

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Published: Sun 11 Jan 2009, 1:39 AM

Last updated: Thu 2 Apr 2015, 4:13 AM

“Clearly the situation is dire. It is deteriorating, and it demands urgent and immediate action,” Obama said just hours after the Labor Department announced US employers shed a massive 524,000 jobs in December, capping a yearly loss of 2.6 million and pushing unemployment to a 16-year high of 7.2 percent.

The grim new economic data—described by the incoming president as the single worst year of job losses since World War II—“only underscores the need for us to move with a sense of urgency and common purpose,” said Obama, who inherits the country’s deepest economic crisis in decades in 11 days when he assumes the presidency.

“There are American dreams that are being deferred, and that are being denied because of the current economic climate.”

But Obama said he was pleased with the pace of consultations with Congress and his transition team on the American Recovery and Reinvestment Plan, his stimulus package aimed at saving or creating three million jobs and getting the stricken US economy off life support.

“We have made good progress in these consultations,” Obama said. ”I look forward to working closely with Congress to shape legislation that will work for the American people.”

Obama would not be drawn into addressing the actual amount of the stimulus package or whether he would let it grow amid criticism that the existing plan, currently pegged at 775 billion dollars, would not be enough if it were expanded to cover new infrastructure and energy renewal projects as some lawmakers want.

“I think there are going to be a lot of different opinions out there. We’re going to take all of them in, and at the end of the day, we’re going to have a package that Congress passes and I sign,” he told reporters.

Top Obama aides launched a lobbying blitz in Congress Thursday in a bid to drive the plan into law by early February, but senators from Obama’s own Democratic Party raised red flags over a 300-billion-dollar tax cut at the core of the stimulus plan, questioning whether it would spur growth or create jobs.

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