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Published: Wednesday July 15, 2009 MYT 7:47:00 AM

Obama: Unemployment will get worse before shrinking


WARREN, Michigan: Conceding unemployment will get worse before it shrinks, President Barack Obama on Tuesday unveiled a US$12 billion plan to help community colleges prepare millions of people for a new generation of jobs.

Challenging critics, he said he welcomed the task of turning around the economy.

"I love the folks who helped get us in this mess and then suddenly say, 'Well, this is Obama's economy,"' the president told an outdoor crowd at Macomb Community College.

"That's fine. Give it to me. My job is to solve problems, not to stand on the sidelines and harp and gripe."

Obama did not identify his target for those comments, but he has been under increasing fire from Republicans over the pace of the economic recovery and the soaring deficit.

He brought his message to a state reeling from the loss of auto jobs. Michigan's unemployment rate is 14.1 percent, the nation's worst.

"The hard truth is that some of the jobs that have been lost in the auto industry and elsewhere won't be coming back," Obama said.

"They are the casualties of a changing economy."

To that end, he proposed an "American Graduation Initiative" to bolster the two-year community college field that serves millions of students as a launching point for careers or a step toward expanded higher education.

The idea is to train people for jobs, such as those expected in the clean energy industry, when the economy turns around and begins to create jobs again instead of shedding them.

Under the plan, competitive grants would be offered to schools to try new programs or expand training and counseling.

High dropout rates would be addressed by designing programs to track students and help them earn an associate's degree or finish their education at a four-year institution.

Money would also be spent to renovate and rebuild facilities, and online courses would be developed to help colleges offer more classes.

The White House says the cost would be $12 billion over 10 years; Obama says it would be paid for by ending wasteful subsidies to banks and private lenders of student loans.

"Time and again, when we have placed our bet for the future on education, we have prospered as a result," Obama said.

Republican Sen. Lamar Alexander of Tennessee, a former education secretary, said Obama's plan is a "typical proposal" that sounds better than it is.

"When our biggest problem as a country is too much debt, he's taking the entitlement spending he claims to be saving from the student loan program and adding it to the debt," Alexander said.

Obama's speech came a day after the White House issued an upbeat report predicting that health care and environment-focused jobs would help drive a jobs recovery but that education and training would have to keep up with a demand for higher-skilled workers.

In the report, Obama's economic advisers said U.S. post-high school education and training need to be more effective at encouraging participants to complete their training and to respond to the labor market.

Earlier on Tuesday at the White House, Obama said he expected that the nation's unemployment rate would continue to "tick up for several months."

It is now at 9.5 percent, the highest in 26 years.

Obama said renewed hiring tends to lag behind other signs of economic recovery.

In Michigan, Obama called the $12 billion in spending over the next decade "the most significant downpayment" yet toward achieving his goal of having the highest college graduation rate of any nation.

Speaking in rolled-up sleeves, Obama said jobs requiring at least an associate's degree are expected to grow twice as fast as those where college education is not required.

"We will not fill those jobs, or keep those jobs on our shores, without the training offered by community colleges," Obama said. - AP

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