Coming off the heels of last week's jobs summit, today would have been a good time for President Barack Obama to have cranked up the volume a little and suggested from his bully-pulpit that Democratic party leaders boost their proposed job-creation bill from $300 billion to, say, half a trillion or more. Although offering a satisfying blast at the Republicans, he chose a more modest path. What in the world happened to all those good jobs summit ideas, anyway? Are they being fine-tuned somewhere? Or shelved to be forgotten?
Much of the administration's proposal would simply extend or expand what is already contained in the existing American Recovery and Reinvestment Act, the stimulus package.
There was no mention of a new CCC or WPA, no mention of a Grameen-style bank for small entrepreneurs that brooklynbadboy favors, no mention of pressing banks to expand their lending to small businesses. And, to nobody's surprise, no mention of an industrial policy and a revamped trade policy. It could not in any way be described as the new New Deal.
Some portion of the $200 billion the administration says has been recaptured from the Troubled Assets Relief Program will be redirected toward trying to create new jobs, the President announced in his speech. How much of the TARP funds will ultimately go for deficit reduction and how much for what the President outlined is unknown until Congress acts. His focus was mostly on helping small business expansion on both the cost and credit side, building and repairing infrastructure, and boosting clean energy, specifically retrofits and weatherization. Some details can be found here.
Specifically, the administration plan would:
• provide zero capital gains for investments in small business stock for one year; extend through 2010 the ARRA provision allowing small businesses to immediately expense up to $250,000 of qualified investment; extend the ARRA's bonus depreciation tax incentive; extend the ARRA provision that accelerates the rate at which business can deduct the cost of capital expenditures; enact a new tax cut for small businesses to encourage hiring in 2010; eliminate fees and increase guarantees for small businesses that borrow through major Small Business Administration programs.
• provide additional investment in highways, transit, rail, aviation and water; support merit-based infrastructure investment that leverages federal dollars, as was done through the Recovery Act’s TIGER grants program.
• provide rebates for consumers who make energy efficiency retrofits; expand federal leveraging for programs such as industrial energy efficiency investments; establish tax incentives for investing in renewable manufacturing facilities in the U.S.; provide funding for "cash for caulkers."
Accomplishing most or all of this depends on Congress. And that depends on whether Democrats who believe something additional should be done to deal with the still-disastrous unemployment situation can overcome the opposition of the party's deficit hawks and, of course, the folks across the aisle in the Party of No-gotiators and No Jobs.
Chris Bowers has a good take on what the congressional jobs bill might look like and who came up with the specific items in it here based on this:
• $100 billion for unemployment and COBRA extensions.
• $75 billion for aid to states. It's estimated that, collectively, they face a $369 billion revenue deficit in their 2010 and 2011 fiscal years.
• $50-$69 billion for infrastructure. The President suggested $50 billion in his speech, but the existing bill in Congress says $69 billion.
• $50 billion for small business lending from TARP.
• At least $47 billion in small business tax credits and SBA lending.
Here we go again, unfortunately. It's a package too small, certainly too small as a first option given that we know it will be chopped and shaved. The aid to states alone should be at least tripled. Half a trillion dollars now would get stimulus back to what Christina Romer and others suggested 11 months ago that the original package should be: $1.2-$1.3 trillion.
The congressional debate over this is easy to imagine. The Republicans will argue (along with their conservative Democratic accomplices) that, despite the analysis in the Congressional Budget Office report, the stimulus bill didn't work. And then they will say, contradicting themselves, that the economic situation is improving so there is no need for more stimulus. But then trying to have it both ways is a trait of modern Republicans and many of their Blue Dog pals.
Meanwhile, despite having been rescued from something far worse, Americans are still losing jobs, getting cut to part-time work, or opting out of the labor force altogether - which actually makes the unemployment statistics look better than they are. Many experts say the chances are that official unemployment will average more than 10% throughout 2010 and recover quite slowly in 2011 and beyond. We all know the official "headline" unemployment statistics only tell us about half the story.
The extra money that President Obama and Congress are proposing be spent to improve that situation represents a welcome but overly modest amelioration for the short run. More is needed. And still missing is a focus on the long run, the structural problems that have been pounding on American workers for the past three-plus decades while too many Democrats either abet the problem or stand around worrying more about their own fate than that of the people they are supposed to represent.