Senate jobs bill needs less modesty, more cash

In the past year, thanks largely to the Recovery Act and other help from Congress in terms of direct infrastructure and other spending, targeted tax cuts and humongous aide to the states, the economy avoided a complete collapse and a second Great Depression.  Thanks largely to that kind of spending, the job loss picture turned around to look like this:

 January Jobs Report 2010

So of course, the United States Senate, masters of mediocrity, decides it's time to slow things down a bit.  Senate Democrats released a draft plan of their new jobs bill today, and it is rather disappointing.  It is missing some pretty critical and important stuff.  CNN reports on the genius Senate bill:

No help for the states.  Come again?  Yes, the Senate bill - the bill originating in the legislative body whose name literally means 'the house of the States' - does not have any help for the cash strapped states that now face a combined $180 billion budget shortfall this coming fiscal year.  What could that mean?  The Center for Budget and Policy Priorities estimates that state governors' new budgets without additional federal aid could result in the loss of 900,000 jobs.  Why are we beginning a jobs bill with the brilliant idea not to save the jobs of teachers, police officers, firefigthers and other essential state workers?  The House-passed bill, in contrast, has $27 billion in aid for states, and it is redirected from TARP funds, either remaining or repaid.

No direct infrastructure spending.  Our bridges are crumbling and our infrastructure is in need of major overhaul.  To bring traffic under control and to increase the energy efficiency of America, we need investment in mass transit and new highway construction.  To boost the economy, we need jobs.  It seems to me like these things come together like peas in a pod.  Put money into infrastructure, build more highways, invest in mass transit, reduce traffic congestion and reduce pollution, and create jobs in the process.  What exactly is the problem?  The House bill invests $35 billion in infrastructure.  Once again, it is redirected from the bank bailout (TARP) funds, and not new spending.  What's the problem?

Well, the problem, seems to be the Republicans' 41-59 majority in the Senate resulting from newly minted President of the United States Freshman Senator from Massachusetts Scott Brown.
Republicans, however, have said they oppose shifting TARP money to job creation. They also have said they don't think infrastructure spending creates jobs, in direct contrast to congressional Democrats and the White House.
I seem to remember Republicans crowing about how money was going to TARP and not job creation last year.  Now that we're taking some of that money after an unexpectedly high rate of TARP fund repayments from banks, and want to shift it to job creation, they have a problem with that.  I also have a question for Republicans who don't think infrastructure spending creates jobs.  Who do you think is going to haul the concrete to fix the highways and build new ones?  Construction workers.  Sounds like jobs to me.  Who do you think are going to design the new mass transit vehicles, pathways and the new bridges?  Engineers.  Sounds like jobs to me.  In fact, every $ 1 billion in direct infrastructure investment creates 18,000 jobs.  So had Senate gone the way of the House and appropriated $35 billion for direct infrastructure spending, it could have created 630,000 additional jobs.

So what is in there?  Here's the only really new, decent idea in the Senate bill, and surprisingly enough for a decent idea, it is reported to have bipartisan appeal.  It has a payroll tax credit for employers who hire employees who have been laid off for at least 60 days, in place of the President's preferred $5,000 per new job credit.  That modest, $10 billion plan is expected to create as many as 270,000 jobs over the next year and a half, according to the Boston Globe.

The Senate bill also extends unemployment and COBRA benefits for three additional months.  That will keep some money and health insurance in place for approximately 1.2 million people.  Good thing, but these are not new jobs.

All good things, but there are still no numbers on how many jobs would be created by them.  But because the Senate is full of masters of mediocrity, they are also running around finishing last year's business:
The rest of the measure contains mostly last year’s unfinished business, including renewal of business tax breaks that have expired, an extension of unemployment benefits and health insurance subsidies, and a delay in a cut in Medicare payments for doctors.
Great.  It all needs doing.  The House bill has all of this stuff, too (actually the House bill extends COBRA for 15 months).

Don't get me wrong, I am glad the Senate is finally crunching something out on jobs before we are all dead.   While I am always a proponent of taking whatever we can get, this is far too little.  It is already running over a million and a half jobs short of the House bill.  And right now is not the time to think about ways to create the least amount of jobs.  Now is the time to aggressively and directly invest taxpayer dollars into the economy and give it a jolt.  For Pete's sake, we are moving in the right direction.  Our GDP numbers are turning around - we had the best economic growth in six years, and more impressively, a one-year net turn around of 12 percentage points in GDP growth (negative 6.4% in the first quarter of 2009 to positive 5.7% in the last quarter):

Gross Domestic Product Increases by 5.7 percent

The state job cuts alone will wipe a full percentage point off the GDP.  Let's not go around balancing the budget on the backs of people who need jobs.  Let's not go around stifling economic and job growth at this crucial point in time, when economic and job growth are exactly what is needed to bring the deficit under control.

The Senate jobs needs less modesty.  A lot less.  It needs more cash.  A lot more.  And that should be pushed through, if need be, through reconciliation.  The jobs bill is an entirely budgetary matter - having to do only with revenue and spending (who gets tax credits, whose tax loophole is closed, how much money the federal government gives to states, etc.).  If anything at all can be passed through reconciliation, this can.

Like what you read? Chip in, keep us going.

Video: Obama news conference 2/10

An open letter to Jim Dean and DFA