- The Washington Times - Monday, April 5, 2010

President Obama’s chief economic adviser said Sunday that, more than a year after the passage of the $787 billion stimulus bill, the U.S. economy still has “a long way to go.”

Lawrence H. Summers, director of the National Economic Council, said that despite a modest rise last month in employment, pushing the unemployment rate down from its current 9.7 percent level won’t be easy.

“It is the president’s preoccupation to put people back to work,” said Mr. Summers, who appeared on a pair of Sunday talk shows. “The trend has turned, but to get back to the surface, we’ve got a long way to go, and that’s what we’re fighting to do every day.”

Another top economic specialist, Christina Romer, who heads the White House Council of Economic Advisers, predicted renewed job growth, but also said there’s a “big hole” in the economy from job losses owing to the recession. Like Mr. Summers, she said Americans still face “a lot of head winds” from the financial crisis that began at the end of President George W. Bush’s term.

Both advisers extolled last month’s job increases of 162,000, though the unemployment rate remained unchanged. Still, the March numbers were the highest growth rate in three years, a fact the advisers said bodes well for the future.

“The number of projects in which we’ll be investing in the first half of 2010 is nearly twice what it was in the second half of 2009, so it will gather force,” Mr. Summers said. “I would expect continued progress in job creation.”

He predicted the economy will continue creating jobs, but the unemployment rate will decline slowly because more people will start trying to find work as the economy improves.

Mr. Summers, who also served as Treasury secretary under President Clinton, also said he expects Congress to pass financial-reform legislation soon. The Senate is weighing regulatory reform, but the bill has stalled, and Mr. Summers said passage “won’t be easy.”

The bill, sponsored by Connecticut Democrat Sen. Christopher J. Dodd, would set up a new council of regulators to assess financial risk, create a process for liquidating distressed financial firms and crack down on derivatives markets.

Mr. Obama has said he wants to see it passed in the Senate within two weeks, and Mr. Summers said, “I expect that reform is going to pass.”

Both advisers also refused to explicitly target China, the largest holder of U.S. promissory notes, over charges that it is manipulating its currency to keep its value artificially low and give it a trade advantage over the U.S. and the rest of the world.

“There are clearly crucial issues with respect to commercial practices in a number of countries, including China,” Mr. Summers said.

Mrs. Romer initially answered “Meet the Press” host David Gregory’s question about whether China manipulates its currency by calling the subject “something that the secretary of the Treasury would speak on.” She later said the White House thinks China’s yuan “needs to be more influenced by market forces,” but declined to say whether the Asian nation was keeping the currency artificially cheap.

“We’re going to be trying to get the kind of result we want, which is something more in alignment,” she said.

With Chinese President Hu Jintao due in Washington on April 12 for a nuclear-security summit, the Obama administration has delayed an April 15 report on whether China is manipulating its currency.

Beijing has amassed huge volumes of foreign reserves in the process of keeping the yuan’s value pegged to the dollar, angering U.S. lawmakers who say the practice gives Chinese exports a price advantage at the expense of American jobs.

Although the U.S. will delay its currency-manipulation report to avoid offending China, American officials will raise the issue at subsequent meetings, Mrs. Romer said. “This is absolutely going to be an issue that’s high on the agenda,” she said.

Mr. Summers appeared on ABC’s “This Week” and CNN’s “State of the Union.”

This article was based in part on wire-service reports.

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