How Long Will Unemployment Outweigh Deficit Concerns?

Federal Reserve Chairman Ben Bernanke is calling for the U.S. government to begin addressing the nation's budget deficit. But with a jobless rate that continues to rise and a nation of employers still reluctant to hire, most lawmakers appear to be more interested in finding the right spending tools to address unemployment.

[See more on the hiring tax credit and unemployment extension.]

Another federal extension of unemployment benefits is likely, although passage of a Senate version of the bill is taking longer than some would like. CQPolitics reports today that Republicans are trying to include an amendment extending the first-time homebuyer tax credit in the unemployment extension bill, which could further delay passage of the bill. Republicans last week delayed the bill because they disagreed with Democrats over how it should be funded—not over the extension itself. 

Lawmakers are also showing increased interest in a tax credit for employers that make new hires. The White House seems willing to discuss job-creation tools—so long as they are not actually called "stimulus." And a recent survey shows Americans, not suprisingly, are generally more interested in improving the nation's employment situation than in solving its deficit problem.

[See one piece of good news about jobs.]

So, there's no small amount of interest in solving the jobs problem right now. But the White House may very well turn its attention to the deficit next year, says the WSJ's Gerald Seib. President Obama's State of the Union in January is "likely to focus much more on how to build a ladder for the government itself to climb, slowly, out of a big deficit hole," Seib says. And in February, his budget will likely reflect a fresh appetite for deficit cutting.