Greenspan backs benefits after 'pretty awful' jobs report

Former Federal Reserve Chairman Alan Greenspan and senators from both parties on Sunday supported the extension of specific unemployment and healthcare benefits that were part of the Obama administration's $787 billion stimulus package.

Greenspan said on ABC's "This Week" that he did not believe a second large stimulus package is necessary and preferred to see the effect of the remaining 60 percent of the package before considering any additional fiscal efforts.

But Greenspan voiced strong support for an extension in unemployment insurance benefits, which he said were not really stimulus programs.

Sens. Charles Schumer (D-N.Y.) and John Cornyn (R-Texas) both supported such an extension.

"We’re going to pass a bill this week," Schumer said.

Schumer and Cornyn also supported an extension of benefits for people to purchase healthcare insurance under the COBRA program, as well as an extension of the first-time homebuyer tax credit.

Their comments came on the heels of a worse-than-expected jobs report from the Labor Department on Friday that showed 263,000 jobs were lost in September and the unemployment rate increased to 9.8 percent. While most forecasters predict that the recession has ended technically and the economy is starting to grow, the impact of the recession will continue to be felt as more Americans lose jobs.

Greenspan called the jobs report "pretty awful" and predicted that the unemployment rate would continue to rise.

"We’re going to penetrate the 10 percent barrier and stay there for a little while before heading down," Greenspan said.

Greenspan also underscored his position that healthcare reform legislation under debate in Congress must do more to reduce the country's long-term fiscal burdens.

President Barack Obama and Democrat allies in Congress aim to pass a bill that is deficit neutral in an effort to keep the government's spending commitments to a minimum. But Greenspan has been concerned that such an effort alone won't do enough to deal with the long-term fiscal burdens, particularly those stemming from the bulge of aging Baby Boomers and their impact on Medicare entitlement spending.
 
"Revenue neutral is not adequate," Greenspan.