Washington: US lawmakers presented a likely deal Thursday on a bipartisan package for reviving job growth after the White House said it expects the US unemployment rate to remain at a quarter-century high of 10 percent for much of the year.
Two leading US senators released a $90-billion draft bill that includes tax incentives to encourage hiring by smaller businesses, extending unemployment and health benefits, and some limited new spending on infrastructure.
The initiative by Democratic Senator Max Baucus and Republican Senator Chuck Grassley – both leaders of the Senate Finance Committee – was welcomed by President Barack Obama and could be voted on by the whole Senate over the weekend. The lower House of Representatives passed a more ambitious $150-billion jobs bill in December.
“The American people want to see Washington put aside partisan differences and make progress on jobs,” Obama said in a statement.
More than eight million Americans have lost their jobs since the country’s worst recession since the Great Depression began in December 2007. The US unemployment rate stood at 9.7 percent in January.
The White House earlier Thursday warned that while the recession has ended, economic growth will not be robust enough to plug the massive jobless gap over the coming year.
In an annual economic report submitted to Congress, the White House Council of Economic Advisers predicted that 94,000 jobs would be added per month on average during 2010. Yet the jobless rate might rise again in coming months as many discouraged workers try and re-enter the labour market.
Obama, whose popularity stumbled over the past year amid the weak economy, promised to make job creation his “number one focus” in 2010. Some critics fear the new jobs package will unnecessarily add to an already skyrocketing budget deficit.
The unemployment rate is forecast to remain at an average of 10 percent in 2010, before sliding to 9.2 percent over 2011 and 8.2 percent in 2012, according to the White House report.
Obama’s advisers have argued the situation would have been far worse this year without measures taken in 2009 to halt the economic slide. The first stimulus package passed last February, worth $787 billion, has saved or created two million jobs to date, according to government estimates that have been disputed by critics.
The White House forecast that the US economy will grow by three percent in 2010 and 4.3 percent the following year. Gross Domestic Product (GDP) surged at an annual rate of 5.7 percent in the fourth quarter of 2009, according to initial government estimates.