White House: Unemployment to Stay High Through 2012

Posted September 1st, 2011 at 5:05 pm (UTC-5)
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The White House has released new figures indicating the U.S. economy will grow by about 1.7 percent this year and that the nation's unemployment rate might still be as high as 9 percent next year. Officials predict the jobless rate will average 9.1 percent this year.

The Office of Management and Budget released the report Thursday, one week before President Barack Obama addresses a joint session of the U.S. Congress to outline a new plan for job creation and economic recovery. The 1.7 percent economic growth rate is a full percentage point lower than the Obama administration predicted in February.

Government analysts, however, said they expect 2.6 percent economic growth next year.

Meanwhile, the White House said the federal budget deficit is now projected to be $1.3 trillion — a 20 percent decrease from the $1.6 trillion figure forecast in February because of increased tax revenues and spending cuts.

President Obama is seeking reelection next year. His public approval ratings have suffered recently amid bad economic news. No president in modern times has won reelection with unemployment as high as 9 percent. The Office of Management and Budget said it does not expect the unemployment rate to fall below 6 percent until 2016.

President Obama, a Democrat, has called on opposition Republican lawmakers in Congress to join him in supporting new measures to boost hiring.

The White House budget chief, Jack Lew, said Mr. Obama might propose a mix of tax cuts for middle class families, more government spending to repair the country's aging infrastructure and renewed assistance for the country's long-term unemployed.

The White House said the ideas represent bipartisan proposals. But in politically-divided Washington, most Republican lawmakers say they are opposed to more government spending. They contend that too many government regulations have inhibited job growth and are proposing to limit the scope of the restrictions.