Treasury Secretary Henry Paulson Heads To The Hill To Sell The Stimulus Package
Tuesday, February 05, 2008SUSIE GHARIB: Treasury Secretary Henry Paulson said today he's keeping a close watch on the financial markets. The turmoil in the markets will be at the top of the agenda at this weekend's meeting of finance ministers from the leading industrial nations. But on Capitol Hill today, Paulson's focus was on the U.S. economy as he testified before Congress on the Bush budget and the stimulus package. Darren Gersh reports.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Senators from both parties peppered Treasury Secretary Henry Paulson with questions on the tough job market. Maine Republican Olympia Snowe wanted to know why the administration opposed extending unemployment benefits for 1.3 million Americans who have been out of work for more than six months.
SEN. OLYMPIA SNOWE, (R) MAINE: We just had a big headline last week saying sawmills are closing and people saying we're going to have to move further south in the state perhaps to find a job, you know with a living wage of some type. I mean, it's dramatic, because we've lost a lot of the manufacturing jobs in Maine and I think it's a microcosm of America.
GERSH: The stimulus bill now before the Senate would extend unemployment benefits by 13 weeks in states where the jobless rate is over 6.5 percent -- the cost, $14 billion. Paulson says that's not needed, yet.
HENRY PAULSON, TREASURY SECRETARY: With unemployment at 4.9 percent, to extend benefits, it would be unprecedented and it would send a message to the world which I think is the wrong message. It's never been extended when unemployment is below 5.7 percent.
GERSH: Michigan Democrat Debbie Stabenow argues extending unemployment benefits would be the best way to stimulate the economy, supporting spending by strapped families, many of them living in Michigan, where the unemployment rate is close to 8 percent.
SEN. DEBBIE STABENOW (D) MICHIGAN: This whole notion that somehow extending unemployment compensation, which is 40 percent of a worker's average wage, is going to stop somebody from trying to get a job, is just a myth.
GERSH: In past recessions, Congress has extended unemployment benefits after the jobless rate rose about two percentage points; so far, it's up half a percentage point. Even so, Goldman Sachs political analyst Alec Phillips expects jobless benefits will soon be increased.
ALEC PHILLIPS, WASHINGTON ANALYST, GOLDMAN SACHS: They are either going to extend it as part of the stimulus bill or they are going to extend benefits as part of some later package, either this fall or potentially even next year, once unemployment hits as high as maybe 6 percent under our forecast.
GERSH: The showdown on extending unemployment benefits could come as soon as tomorrow, when John McCain, Hillary Clinton and Barack Obama return to the Senate following today's super Tuesday voting. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.
