Obama calls for major new stimulus
Jobs spending » Highway projects, small-business tax cuts are among the proposals.
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President Barack Obama called for a major new burst of federal spending Tuesday, perhaps $150 billion or more, aiming to jolt the wobbly economy into a stronger recovery and reduce painfully persistent double-digit unemployment.

Despite Republican criticism concerning record federal deficits, Obama said the U.S. has had to "spend our way out of this recession" with so many people out of work but insisted he was still mindful of a need to confront soaring deficits. More than 7 million Americans have lost their jobs since the recession began two years ago, and the jobless rate stands at 10 percent, statistics Obama called "staggering."

Congressional approval would be required for the new spending.

"We avoided the depression many feared," Obama said in a speech at the Brookings Institution, a Washington think tank. But, he added, "Our work is far from done."

It was the third time in a week the president had presided over a high-profile event on jobs, responding to rising pleas in Congress that he spend more time discussing unemployment as midterm election season draws near.

Obama proposed new spending for highway and bridge construction, for small-business tax cuts and for retrofitting millions of homes to make them more energy-efficient. He said he wanted to extend economic stimulus programs to keep unemployment insurance from expiring for millions of out-of-work Americans and to help laid-off workers keep their health insurance. He proposed an additional $250 apiece in stimulus spending for seniors and veterans and aid to state and local governments to discourage them from laying off teachers, police officers and firefighters.

He did not give a price tag for the new package but said he would work with Congress on deciding how to pay for it.

On Capitol Hill, estimates of a potential jobs bill range from $75 billion to $150 billion, said Rep. Steny Hoyer of Maryland, the No. 2 Democrat in the House.

"A hundred billion, 150 billion, 75 billion -- those are all figures that are being talked about," Hoyer told reporters.

Those billions would be on top of money for separate legislation for safety-net initiatives such as extending unemployment benefits for the long-term jobless and providing them health insurance subsidies.

Some lawmakers put the total cost of the new proposals at $200 billion or more.

White House economic adviser Jared Bernstein said the White House is considering spending $50 billion on infrastructure projects alone such as roads and bridges and water projects. Other figures, he said, would be worked out with Congress.

While Obama did not propose the kind of direct federal public works jobs that were created in the 1930s, he said government action could set the stage for more job creation by private business. Many of his proposals would extend or expand programs included in the mammoth $787 billion stimulus package passed last winter.

While acknowledging increasing concerns in Congress and among the public over the nation's growing debt, Obama said critics present a "false choice" between paying down deficits and investing in job creation and economic growth.

"Even as we have had to spend our way out of this recession in the near term, we have begun to make the hard choices necessary to get our country on a more stable fiscal footing in the long run," he said.

To find money to pay for the new programs, the administration is pointing to the Treasury Department's report on Monday that it expects to get back $200 billion in taxpayer-approved bank bailout funds faster than expected.

Obama suggested this windfall would help the government spend money on job creation at the same time it eats into the nation's debt.