The US economy has begun to climb out of the worst downturn since the 1930 Great Depression but still needs additional steps by the federal government to stem a crisis in the job market, a senior economic adviser to President Barack Obama said on Sunday.
“What we need now is not the withdrawal of support, but further targeted actions that will help the private sector come back more strongly,” Christina Romer, chairwoman of the White House Council of Economic Advisers, said in prepared remarks for a commencement ceremony at the College of William and Mary in Williamsburg, Virginia.
Text of Romer's remarks was made available in Washington.
“I worry that policymakers may take the return of growth as license to withdraw the support that has been essential to the recovery,” she said.
Romer urged Congress to a pass a series of measures Obama has proposed to jump-start growth, including the establishment of a lending fund to spur credit to small businesses and providing cash-strapped cities and states with aid to help them avoid layoffs of teachers and other local employees.
With the US unemployment rate just under 10%, the Obama administration is juggling the need to spur economic growth with pressure to rein in ballooning US budget deficits.
Obama has named a bipartisan fiscal commission that will report back by December 1 with recommendations for curbing the deficit, which is projected to hit $1.6 trillion this year.
The latest government report on the job market showed employers added 290,000 jobs in April, a stronger-than-expected pace that suggested the economic recovery was gaining steam. But the jobless rate ticked up two tenths of a percentage point to 9.9% as discouraged workers began looking for work again.
“The economy is unquestionably on the right trajectory,” Romer said in her speech. “But, while the economy is recovering, it has not yet recovered.”
“For the millions of Americans still waiting to be rehired - still struggling to provide for their families and make their mortgage payments without a job - this remains an economic crisis.”
Romer, an expert on the Great Depression, used much of her speech to compare the current economic crisis to the long downturn of the 1930s.
She said that Obama once called her his “Frances Perkins,” a reference to President Franklin Delano Roosevelt's secretary of Labor and the first woman to serve in the Cabinet.
Romer said there have been parallels between Obama's economic response to that of Roosevelt but said that was less the result of a deliberate effort but instead was because “we were facing similar problems and shared similar core values.”
She credited Obama's policies, such as enacting the $787 billion economic stimulus program in 2009, with helping to prevent a second Great Depression.
Romer said that, like Roosevelt, Obama recognized the economic crisis called for an “all-out policy response” but she described the current president's policies as more “market-oriented” than those of Roosevelt.
Republicans have sharply criticized the stimulus package, calling it an example of overreach by the government and contending that it failed to do enough to spur jobs growth. (Reuters)