Departing White House economist Christina Romer said on Wednesday the United States needs to find the political will for more action to boost the economy and not let high deficits get in the way of creating jobs.
We have tools that would bring unemployment down without worsening our long-run fiscal outlook, if we can only find the will and the wisdom to use them, Romer said in excerpts from a speech she will deliver later at the National Press Club.
The remarks come as a recent raft of data have suggested the U.S. economy has begun to falter after signs last spring that seemed to show it was on the mend.
The reports have put pressure on President Barack Obama's Democrats ahead of November 2 elections that could shift the balance of power in the U.S. Congress.
Obama said this week that he and his advisers were discussing ideas to help boost the recovery, but his spokesman said these would likely be targeted measures.
Within the White House, there has been a debate for several months over whether to focus on further steps to stimulate the economy or deficit reduction. Romer has been in the camp arguing for more stimulus.
Given our long-run fiscal challenges, any additional support should be done in a responsible way ... But concern about the deficit cannot be an excuse for leaving unemployed workers to suffer, Romer said in the speech excerpts.
The $814 billion economic stimulus package that Obama pushed through Congress last year has been heavily criticized by Republicans.
They contend it exacerbated the budget deficit -- which is estimated to hit $1.5 trillion this year -- without bringing down the 9.5 percent unemployment rate.
Romer stopped short of calling for a second stimulus package, but some analysts interpreted her remarks to suggest she favors that.
Romer launched a vigorous defense of the stimulus in her speech, saying the recession caused by the 2007-2009 financial crisis was fundamentally different from other postwar recessions and required dramatic action.
Because the final bill was a mixture of hundreds of measures, many of which don't come with Recovery Act signs or easily identifiable links to the Act, it (has) been hard for people to see what the Act has done, she said.
But it is precisely because it works through existing programs and spreads funds widely that it could get out quickly and reap large benefits, Romer said.
Romer said she was proud of the recovery actions we have taken and said they made the difference between a second Great Depression and a slow but genuine recovery.
Romer announced earlier this month that she would leave her job as chairwoman of the White House Council of Economic Advisers on September 3 to return to her job as a professor at the University of California, Berkeley.
Experts say a Labor Department report due on Friday could show an uptick in the U.S. jobless rate in August to 9.6 percent from 9.5 percent in July, which would add to Obama's dilemma ahead of the November congressional elections.
(Reporting by Caren Bohan, editing by Vicki Allen)