White House plans more to trim joblessness: aide

WASHINGTON Sun Jan 10, 2010 12:40pm EST

People gather while awaiting the start of seminars for job seekers at an employment center in San Francisco, November 20, 2009. REUTERS/Robert Galbraith

People gather while awaiting the start of seminars for job seekers at an employment center in San Francisco, November 20, 2009.

Credit: Reuters/Robert Galbraith

WASHINGTON (Reuters) - President Barack Obama plans more economic stimulus measures to bring down the high U.S. unemployment rate, while cutting the bulging budget is a longer-term challenge, a top White House economic aide said on Sunday.

"We are ... talking about actions right now to jump-start job creation," White House Council of Economic Advisers Chairwoman Christina Romer said on CNN's "State of the Union.

"You don't get your budget deficit under control at a 10 percent unemployment rate," she said.

Beating back unemployment will be a key yardstick by which U.S. voters will measure Obama's success in November congressional elections and will go a long way to determining his own long-term political future.

Also troubling to many is a budget deficit that has ballooned from spending aimed at cushioning workers and businesses through the worst recession in decades.

"We have to do something," Romer said. "There are more targeted actions that we think absolutely will help."

Obama will focus is on getting the U.S. fiscal house in order over the longer run, she said.

Unemployment was stuck at 10 percent in December and businesses cut another 85,000 jobs, the lingering after-effects of the devastating financial crisis that triggered an economic global recession. With Obama's popularity drifting down to around 50 percent, his Democratic party is expected to lose seats in Congress in fall elections unless the White House can engineer a convincing economic turnaround.

Limiting the president's room to move is a federal budget deficit that hit a record $1.4 trillion in fiscal 2009. The president has also promised not to raise taxes on U.S. families making less than $250,000.

Obama on Friday announced details of a government funding program for clean technology jobs previously announced in the $787 billion emergency spending package that he signed in February. Many analysts warn that adding to the deficit could have negative repercussions by scaring off investors in U.S. government debt, raising borrowing costs across the economy.

Congress is considering proposals to help labor markets that include a $155 billion jobs package that has already cleared the House of Representatives.

Romer said more spending will be necessary to sustain a fragile recovery.

"The sense that we need to do more is overwhelming," she said on ABC-TV's "This Week."

Extending expiring unemployment benefits and state aid would be important steps, as will narrower initiatives such as tax breaks to boost small business hiring, she added.

(Reporting by Mark Felsenthal, Editing by Maureen Bavdek)

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