Obama weighs using TARP bailout funds to spur job growth

The Obama team may tap bailout funds from TARP – meant to help the financial sector – to stimulate job growth.

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The November jobs report – registering a drop in unemployment and barely any jobs lost – came as a pleasant surprise to the White House, which is considering whether to use remaining financial bailout funds to help boost job creation.

The unemployment rate fell last month to 10 percent, the government announced Friday. Payrolls fell by 11,000, a dramatic improvement from October’s loss of 111,000 jobs.

On Thursday, press secretary Robert Gibbs had caused a brief flurry in financial circles when he told reporters that there might be an “uptick” in the nation’s unemployment rate. Gibbs later clarified that he had no advance word of what the figures would show.

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Best jobs news in 22 months

The press secretary told reporters gathered in his office Friday morning that the November figures “show that we continue to make much-needed progress in getting this economy going and in getting the right trend going in hiring. These numbers were the best numbers that have been released in 22 months of jobs reports.”

Mr. Gibbs argued that the $787 billion stimulus program approved and signed into law in February “got economic growth going again and now we see positive movement in jobs.”

May be bumps ahead

Private forecasters, including Economy.com chief economist Mark Zandi, warn that the jobless rate could hit 11 percent next year. And Friday morning Gibbs cautioned that “there will be bumps along the way, there will be ups and downs. But the president is pleased that we continue to move in the right direction.”

Responding to voters’ deep concerns about the economy, President Obama is slated next Tuesday to give a speech at Washington’s Brookings Institution where he will lay out plans to create more jobs.

“He will outline some of what he supports moving forward,” Gibbs said. “I don’t think it will be the totality of all that we are looking at, but I think the president believes that we should and must do everything in our power to make an environment for job growth and job creation.”

On Capitol Hill Thursday, House Speaker Nancy Pelosi spoke in favor of using money left over from the Troubled Assets Relief Program, or TARP, for job-creating measures such as small business loans, teacher salaries, and highway construction. It would have the advantage of not adding to the government's budget deficit. House Republican leader John Boehner called the approach "a very big mistake."

Would the president include Speaker Pelosi’s TARP plan in his speech on Tuesday? one reporter asked Gibbs. “I think that is likely,” he said.

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