Obama predicts California will be biggest job producer

WASHINGTON -- President Barack Obama says the best way to judge his economic stimulus plan in the next two years will be whether it creates or saves from 3 million to 4 million jobs.

And if the White House predictions are correct, no state will produce more jobs than California, which has been losing jobs faster than any other state.

More than 10 percent of the jobs -- 421,000 -- are forecast to come from the Golden State, which has a 9.3 percent unemployment rate, the fourth highest in the nation and California's highest in 15 years. The state's loss of 78,200 in December was the most of all 50 states, according to the U.S. Labor Department.

As Congress put the finishing touches on its $789 billion stimulus this week, Obama has been busily selling it by touting its impact on individual states.

After flying to Indiana and Florida earlier this week, Obama took his motorcade Wednesday morning to a dusty construction site in Virginia, where he said his plan would create 100,000 jobs in Virginia alone.

"Across the country, states need help. And with my plan, help is what they will get," said Obama, standing next to Democratic Gov. Tim Kaine.

Obama said states are facing "acute new responsibilities" during the recession, with more people unemployed, signing up for Medicaid and requesting other government services. At the same time, he said, people are spending less and earning less, which hurts government tax revenues.

In the afternoon, the president continued his state-by-state sales pitch at the White House, meeting with 16 reporters from regional newspapers, including the Sacramento Bee and San Luis Obispo Tribune.

"We feel optimistic that this is going to get done," Obama said shortly after House and Senate negotiators struck a deal on a final stimulus bill. He said it would provide "a quick shot of spending" to jolt the economy.

Obama told the group that he will ask for an independent analysis of the number of jobs created or saved by the stimulus. But he expressed no doubt that his goals will be met, even though he acknowledged that some jobs saved will be hard to count.

"I would argue actually that what's most likely is we undercount jobs," Obama said. "In the sense that if you save a job of a teacher who isn't laid off, you're probably not counting the fact that that teacher is still going to the dry cleaner down the street because she's still got work, whereas she might have stopped going. ... So I think the ripple effects of this package won't be entirely documentable, but I think it will be significant."

Obama said he received a letter from Caterpillar officials on Wednesday, who said they will reconsider more than 20,000 layoffs if Congress passes the stimulus and it's signed into law. And the president said it will be easy to trace some of the saved jobs by looking at whether states and local units of governments decided not to lay off workers after receiving stimulus funds.

"If as a consequence of this money they're not laid off, that is a big stimulus," Obama said.

The White House is not forecasting how much money individual states would receive under the stimulus, but the administration predicts that 90 percent of all the new jobs would be created in the private sector, in industries ranging from energy to health care.

The White House estimates that 12.4 million workers in California would benefit from a tax cut of up to $1,000.

An estimated 522,000 California families would be eligible for a new $2,500 partially refundable tax credit aimed at making college tuition more affordable, the White House said.

And 2.4 million workers in the state would get an extra $100 per month in unemployment insurance, according to the administration's estimates.

Finally, the White House said, at least 1,208 schools in the state would be modernized with new labs, classrooms and libraries.

California Republican Gov. Arnold Schwarzenegger is backing the stimulus, along with both of the state's Democratic senators, Dianne Feinstein and Barbara Boxer.

"There is a very simple, urgent reason for this bill: We need to save jobs and we need to create jobs," Boxer said. If Congress did nothing, she said, it would be "a hostile act because it continues the dangerous status quo."