Is Stimulus II now inevitable?

President Barack Obama said today’s report of U.S. job losses is a ‘sobering reminder that progress comes in fits and starts’ and that he is considering additional steps to spur economic growth. ‘I’m working closely with my economic advisers to explore any and all additional options and measures that we might take to promote job creation,’ Obama said at the White House.

White House officials and Democratic leaders in Congress are negotiating an extension of key elements of the stimulus bill in light of the continuing deterioration of the job market, an administration official said Friday. Obama administration economists would like to see unemployment insurance extended beyond the Dec. 31 expiration date. They also want to maintain a stimulus program that offers tax credits to pay 65% of the cost of maintaining health insurance policies under the existing Cobra program. Cobra allows laid-off workers to purchase the health plans they had through their previous employer, but the cost is often prohibitive for the unemployed. The White House is also likely to seek an extension of food stamp increases that were included in the stimulus plan. These moves would require fresh legislation. That would likely reopen a debate about the fast-rising federal deficit and the effectiveness of the administration’s $787 billion stimulus package