Travis Martinez – University of New Mexico/ Talk Radio News Service

White House Council of Economic Advisers Chair Christina Romer testified before a joint economic committee Thursday that although the nation’s economy is moving into “recovery phase,” it is likely that the overall unemployment rate will remain painfully weak through 2010.

“As we [U.S. economy] enter the fourth quarter with the unemployment nearing 10 percent, it is likely to remain severely elevated,” said Romer.

Committee Chairwoman Carolyn Maloney (D-N.Y.) expressed deep concerns for the future of jobs and the labor market. During her opening statement, Maloney said that she can see signs of recovery, but it’s contributing little to no help for the labor market.

“I am deeply concerned about the state of our labor market, as I have been since the start of this recession. GDP growth is of little comfort to the millions who have lost their jobs,” she said.

Romer reminded the committee that analysts have predicted that the Recovery Act will have its greatest impact on economic growth in the second and third quarters of this year. By mid-2010, she explained, fiscal stimulus will likely be contributing little to growth. However, Romer said she believes that the country has survived the low point of the recession, adding that there is concise evidence that the policies implemented by the Obama administration are working.

“If GDP growth for the third quarter is indeed positive, as anticipated, this would be strong evidence that the economic recovery is underway,” said Romer.

“Recovery will take time and history suggests that there will be setbacks along the way,” said Lawrence Summers, Director of the National Economic Council and Assistant to the President on Economic Policy, but “the pervasive sense of fear of six months ago has receded” and “the American economy is again progressing.” (0:45)

 

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Coffee Brown, University of New Mexico, Talk Radio News

“The annual budget process is really the truest test of priorities that the President and Congress engage in,” said Sen. Patty Murray (D-Wash.), as she, Sen. Bernie Sanders (D-Vt.), and Sen. Jeff Merkley (D-Ore.) met to define what those priorities are for the Senate Democrats. “We want to put the middle class first by cutting taxes and making key investments to bring this country out of this recession,” she said. The three then defined what those key investments are.

Murray spoke for education, “To revive the American economy and compete in this global economy, we have to expand educational opportunities for all Americans. Investing in education is one of the most certain ways to prepare a skilled and ready workforce.”

She introduced Jaim Foster, a second grade teacher from Alexandria, Va., who described teachers facing cutbacks and uncertain employment, as well as increased responsibilities as school nurses also were cut.

Sanders said, “For decades, politicians have been giving speeches about the need for energy independence.” We send hundreds of billions of dollars a year” out of the U.S., often to more or less unfriendly countries. “Finally the American people have said ‘enough is enough, we have got to do something real,’” he said. “The time is now to break our dependence on fossil fuel, and that is what we are going to do.”

He said the expert consensus is that we must address climate change, and that we are already seeing its effects. The budget will create “millions of good paying American jobs as we move to new kinds of energy,” he said, citing geothermal, wind, solar, and biomass.

He introduced James Walker, President, American Wind Energy Association, who said the industry went from $700 million in 2004 to $17 Billion in 2008, creating over 85,000 jobs. When it reaches its projected potential of 20 percent of our total energy needs, it will be the equivalent of removing 140 million cars, and will have created over 500,000 jobs, he said.

Merkley took healthcare. “I think everyone understands how broken healthcare is,” he said, citing 50 million uninsured, many more who are under-insured, and families whose top concern is “whether or not
they can maintain health insurance”. “The stress is continuous,” he said.

Merkley said that “every single year, double digit increases” in premiums cause more small businesses to stop offering health insurance. He said even larger businesses are now advocating for change.

Sanders finished with, “Ask Sen. (Judd Gregg (R-N.H.)) if he still supports the repeal of the estate tax, which would give one trillion dollars to the wealthiest three tenths of one percent. That’s OK, but when you fund energy, when you fund healthcare, when you fund education, when you put Americans to work to improve the quality of life for our families, somehow that’s a terrible idea.”

Nancy Pfotenhauer, Senior Policy Adviser for the McCain-Palin campaign, believes Senator Barack Obama’s (D-Ill.) tax plan is a ‘europeanization’ of the American economy, and will not work. (0:43)

 

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