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Obama Revises Rescue Plan

By Jonathan Weisman
ST. PETERSBURG, Fla. -- Sen. Barack Obama, reacting to the seventh straight month of job decline, announced a new version of his $50 billion economic stimulus plan, which would use a windfall profits tax on oil companies to finance $500 tax rebates and aid to state governments for energy cost assistance, school construction and infrastructure building.

The new plan reallocates funds announced in the $50 billion assistance plan Obama had pledged two months ago, as part of that plan -- an extension of unemployment insurance and a housing refinancing fund -- has been approved by Congress.

Obama aides and advisers were trying to show they can react quickly to an economic landscape that continues to slide downward. The Labor Department announced that employers shed 51,000 jobs in July, the seventh straight month of job losses which now total 463,000. The unemployment rate rose last month from 5.5 percent to 5.7 percent.

Those numbers elicited very different responses from the presidential candidates.

"Across this country, Americans are hurting and today's job numbers are just the latest reminder of the economic challenges we face," said presumptive Republican presidential nominee Sen. John McCain. "Unlike Senator Obama, I do not believe that raising taxes is the answer to our economic problems. There is no surer way to force jobs overseas than to raise taxes on businesses. The American people cannot afford economic policies that will take us backward."

Obama said, "Today, we learned that 51,000 jobs were lost last month, the seventh straight month of job loss -- now totaling 463,00 jobs lost since the beginning of this year. I've already called for an economic stimulus package on two different occasions this year, and much of what I've proposed has passed in Congress. These efforts have made some difference. But with job losses mounting, prices rising, increased turbulence in our financial system, and a growing credit crunch, we need to do more."

By Web Politics Editor  |  August 1, 2008; 10:48 AM ET
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