April 18, 2024

White House Expects Persistently High Unemployment

The White House budget office forecast on Thursday that unemployment would remain at 9 percent through the 2012 presidential election year, an outlook that it said calls for the sort of the job-creating tax cuts and spending President Obama will propose next week.

The unemployment outlook for the next 16 months reflects a 9.1 percent rate this year, down slightly from the 9.3 percent forecast when President Obama made his annual budget request in February. Next year, the projected jobless rate is 9 percent, up from 8.6 percent in the February forecast.

Unemployment will not return to the 5 percent range until 2017, the budget office said, reflecting the intensity of the hangover from the most severe recession since the Great Depression.

While the budget office’s unemployment forecast for 2012 is no surprise given similar private sector projections, it amounts to the White House’s official acknowledgement of the political hurdle in Mr. Obama’s path to re-election.

The Office of Management and Budget, in its annual midyear update of the nation’s fiscal and economic picture, also said federal budget deficits would be lower for this year and next. The decline stems from spending cuts that the White House and Congress agreed to this year, in particular their August deal to find up to $2.4 trillion in reductions over a decade. The Congressional Budget Office similarly revised its fiscal forecast in its midyear report last week.

For this fiscal year, which ends Sept. 30, the budget deficit will be just over $1.3 trillion, both budget offices have projected.

That is down $329 billion, or 20 percent, from the administration’s deficit estimate at the beginning of the year, reflecting higher-than-expected revenue and lower-than expected spending. A $1.3 trillion deficit is equal to 8.8 percent of the economy, as measured by the gross domestic product, which is far above the 3 percent level that economists generally consider the maximum level desirable.

But the budget office report, released by Jacob J. Lew, Mr. Obama’s budget director, argued that the combination of savings mandated by the August deficit reduction deal and reduced spending over time in Iraq and Afghanistan, together with the expiration of the Bush-era tax cuts for high incomes, would bring the deficit to 2.2 percent of G.D.P. after a decade.

Letting the individual tax rate cuts expire for annual incomes above $250,000 as scheduled after 2012 would save more than $1 trillion through 2021, the Office of Management and Budget said — $866 billion in revenue and $166 billion in interest savings from a lower federal debt.

The importance of also realizing the separate savings called for in the budget deal is why Mr. Obama plans next Thursday to recommend “an ambitious, comprehensive and balanced deficit reduction plan,” the report said. The administration hopes to influence the special Congressional committee that was created by the deal to reach a bipartisan plan by Nov. 23, for House and Senate votes by late December.

As the Congressional Budget Office earlier emphasized, even though annual deficits are expected to decline through the decade as the economy recovers, after 2021 they will climb again because of an aging population and high health care costs that are driving up federal spending, especially for Medicare and Medicaid.

“At the same time,” the report added, “Congress must appreciate that the economy is still wrestling with the after-effects of a very severe recession.” And that, it said, is why Mr. Obama also will propose a job creation initiative for the near term, including new and previously proposed ideas for temporary tax cuts and infrastructure programs and for retraining the long-term unemployed.

Article source: http://feeds.nytimes.com/click.phdo?i=e4a714b76d2974424ee7d153c3660a0e

Bucks: Readers Respond to Juggling Jobs

Sally Ryan for The New York TimesRoger Fierro working with Lynne McDaniel on marketing for her shop in Chicago.

The volume of responses inspired by the article on job juggling that ran on the cover of Sunday Business suggests that the four twentysomethings profiled — Roger Fierro, Mia Branco, Louise Gassman and Maureen McCarty — are just some of the many people working multiple jobs these days. The article garnered 174 published comments, and others listed their jobs on Twitter with the hashtag #myjobs.

project manager, marketing consultant, curator, art dealer, fundraiser/events for a @girlsrockbos, waitress, drummer, resource #myjobsless than a minute ago via web Favorite Retweet Reply

@nytimesbusiness #myjobs Pet sitter,dog walker,royalty reporting, website testing, and *almost* anything else people will pay me for. 3 it!less than a minute ago via web Favorite Retweet Reply

Several commenters pointed out that job juggling isn’t just for the young — many in their 40s, 50s and 60s are working multiple jobs. At a time when they are raising children or thought they would have been in the twilight years of their career, they had hoped to lighten their career burdens, but those plans were scuttled when the economy soured. “I was laid off. I now work selling wine, I blanket horses, I also freelance as a medical writer,” wrote Elizabeth Zima. “I cannot pay my bills and will shortly declare bankruptcy…. This is not fun.”

Other commenters were critical of the individuals profiled in the story for their degree choice. “Where is the acknowledgement that liberal studies will NOT provide one with a living?” asked one. Another implored college students to: “Major where the jobs are. Major where the jobs are. Why is this so hard to grasp?” One commenter, who recently graduated from an engineering program, pointed out that the average starting salaries for almost every degree are available online.

Dismissing the value of a liberal arts education, however, is not entirely fair. While a degree in international studies, history or journalism might not monetize as quickly as a degree in, say, computer science or engineering, a liberal arts degree is supposed to teach some of the critical thinking, reasoning and writing skills that are the bread and butter of the new knowledge economy.

And advice to simply follow the big salaries might be misplaced. There are a lot of people who majored “where the jobs are” — and now have $200,000 in law school or business school debt and can’t get hired. Yes, the people profiled in the article are living on the edge financially, but they are figuring out, albeit slowly, how to parlay their college degrees into earnings.

The story also unearthed some intergenerational tension. Many older commenters were disdainful that Ms. Gassman was wearing expensive boots and that many in her cohort aspire to take a vacation or live in a nice neighborhood. As one commenter put it, “I hope they will someday realize just how lucky they are.”

Finally, a number of the commenters asked, “Why should I feel bad for these people?” In 2011, many young people are forging their way outside of the confines of corporate America in the worst economic downturn since the Great Depression. The real news is that in these conditions, they’re not doing such a bad job after all.

Article source: http://feeds.nytimes.com/click.phdo?i=121e405b66a8a53ff58f7d70235516c3