Team Obama contemplates 2nd stimulus

Obama & Co. Split on Stimulus as Job Losses Mount, Deficit Soars

By Matthew Benjamin, Bloomberg

Democrats who control the levers of power in Washington are divided over whether to push for more deficit spending to end the recession and stem job losses, complicating the possibility of a second stimulus bill. "We need to be open to whether or not we need further action,"

House Majority Leader Steny Hoyer, a Maryland Democrat, told reporters yesterday. Senate Majority Leader Harry Reid of Nevada countered that "there is no showing to me that another stimulus is needed."

President Barack Obama underscored the dilemma by addressing both sides of the argument. In an interview with ABC News yesterday, he said unemployment approaching 10 percent is something "we wrestle with constantly."

He added that spending more borrowed money is "potentially counterproductive."

The split reflects two major challenges facing the Democrats: Record budget deficits that make additional spending much tougher to pass and a 26-year-high unemployment rate of 9.5 percent that is expected to rise to double digits.

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