Obama eyes more money for jobless

Published: Sunday, January 4, 2009 at 6:01 a.m.
Last Modified: Saturday, January 3, 2009 at 11:24 p.m.

CHICAGO - President-elect Barack Obama and congressional Democrats are considering major expansions of government-assisted health care insurance and unemployment compensation as they begin intensive work this week on a two-year economic recovery package.

One proposal, as described by Democratic advisers, would extend unemployment compensation to part-time workers, an idea that congressional Republicans have blocked in the past.

Other policy changes would subsidize employers' expenses for temporarily continuing health insurance coverage to laid-off and retired workers and their dependents, as mandated under a 22-year-old federal law known as COBRA, and allow workers who lose jobs that did not come with insurance benefits to be eligible, for the first time, to apply for Medicaid coverage.

The proposals indicate the sorts of potentially long-range changes that Obama intends to push in his promised American Recovery and Reinvestment Plan, as he named it in his weekly Saturday address on the radio and YouTube. They will be combined with one-time measures that are more typical of federal stimulus packages to jump-start a weak economy, like spending for roads and other job-creating public works projects.

The House is not expected to vote until next week at the earliest, which likely will push final action into February, Democratic aides said.

Obama advisers have said the package would carry a total cost of at least $775 billion. They concede that it is likely to grow in Congress, but both Obama and congressional leaders are intent on keeping the price tag below the politically charged figure of $1 trillion.

In his address Saturday, Obama announced that, as expected, he would begin meeting in Washington on Monday with congressional leaders of both parties.

Obama has vowed to "create or save" 3 million jobs over the next two years. In his address on Saturday, he omitted the word "save," suggesting he would create 3 million jobs - a goal that many economists consider unattainable under current conditions.

The drafting of a two-year plan is being done by a small group of Obama advisers and Cabinet designees.

A main factor slowing down the Obama team's drafting has been the difficulty of reconciling his sometimes conflicting directives.

The president-elect called for including in the plan only proposals that would quickly stimulate the economy. But Obama has also said his recovery plan must make down-payments on his campaign promises for permanent changes that will reshape the economy, especially for the good of low-wage and middle-class workers.

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