Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, February 4, 1993 TAG: 9302040065
SECTION: BUSINESS PAGE: B5 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
NEW JOBS SOON
President Clinton's economic stimulus package will create an "immediate rush" of 250,000 new jobs and help the president fulfill his promise of 8 million in four years, Labor Secretary Robert Reich said Wednesday.Reich said Clinton's economic program, which is still being developed, would focus on initiatives that offered the best promise of creating the most jobs quickly. He said this was critical because the current recovery, unlike past upturns, threatens to leave many people permanently unemployed.
Private economists, studying the emerging outlines of Clinton's program, said Reich's forecast was optimistic but not beyond the realm of possibility.
But they said numerous roadblocks could thwart these goals, from bureaucratic delay in spending the money to the Federal Reserve Board's raising interest rates to fight inflation. They were more optimistic about the short-term than the long-term goal.
"These aren't outlandish claims by any means," said Roger Brinner, an economist at DRI-McGraw Hill Inc., the country's largest private forecasting firm.
"It is not unreasonable to assume that you could get an extra 250,000 jobs over the next 12 months from their package compared to what the economy would have done on its own," said Bruce Steinberg, an economist at Merrill Lynch in New York.
Reich said Clinton has not made final decisions on the stimulus program. But congressional sources, speaking on condition of anonymity, said the administration was studying a $31 billion short-term package that would include $16 billion in public works spending this year and $15 billion in business tax breaks, primarily from a targeted investment tax credit.
Reich refused to provide any breakdown on where the administration expected the 250,000 jobs to come from.
But he said the goal "is making sure the money gets out there quickly. . . . The job picture is not yet where it should be for this stage of a so-called recovery."
He said the administration remained particularly concerned about the unusual nature of this recovery, in which many lost jobs appeared to be gone forever.
"What we see this time is a lot of people who simply are not going to get their jobs back," he said.
Private economists said the administration could come up with a program that would create 250,000 jobs this year, but they doubted Clinton would be able to produce 8 million new jobs over four years because the Fed is likely to be nudging interest rates higher in 1994 and 1995 to retard growth and keep inflation in check.
"Their long-term goal will require some cooperation and generosity from the Federal Reserve, and that may not be in the cards," Brinner said.
The economy must create 100,000 new jobs each month just to employ the people newly entering the labor market. For much of 1992, although the economy was technically recovering, it was not meeting this demand.
But recent signs of accelerating activity are prompting analysts to hope job growth will start to rebound as well.
The government is scheduled to release the January employment data Friday. Economists were looking for payroll employment to increase 110,000, almost double the December gain and the best showing since last July.