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TARP, recovery and now … this!
Posted By Drew Zahn On 11/26/2009 @ 6:25 pm In Front Page | Comments Disabled
Presidents George W. Bush and Barack Obama signed a combined nearly $1.5 trillion in federal spending in the attempt to correct the nation’s economic tailspin, but with unemployment soaring over 10 percent, Congress is gearing up to pass yet another economic “stimulus” package, perhaps as soon as January.
The Los Angeles Times reports that President Obama and fellow Democrats in particular are in process of assembling a new jobs package that would devote unspecified billions of dollars to projects meant to put people back on payrolls in 2010. The House version of “stimulus 3.0″ may even be pushed through as quickly as next month.
The Times cites Democratic House members disappointed that Obama’s $787 billion American Recovery and Reinvestment Act wasn’t larger and pledging to press for a new, substantial spending plan to address unemployment.
“I hope we don’t play around the edges with this and we do what will work. Invest the money now,” said Rep. Barbara Lee, D-Calif. “We have to create jobs, and we have to create them right away.”
Rep. John Carter, R-Texas, however, believes that more government spending will do nothing to solve unemployment.
“There is no doubt that the original stimulus failed to create jobs, and has in fact probably cost additional jobs and prolonged the recession,” he said. “To create jobs we need to lower the tax burden to stimulate investment, which is the exact opposite of what the Democrats did earlier this year and now contemplate again.”
Reports over the success of the last stimulus package are widely mixed, with the White House claiming the spending has created or saved over 640,000 jobs. At the same time, the Government Accountability Office has already discounted tens of thousands of those jobs and found “a range of significant reporting and processing problems that need to be addressed.”
Regardless of how miscalculated the 640,000 number may be, the Bureau of Labor Statistics counts 16 million people, or 10.2 percent of the workforce, unemployed in October, a rise of 3.49 million jobs lost since Obama took office in January.
Nonetheless, an aide to House Majority Leader Steny Hoyer, D-Md., has said that the $787 billion package did what it set out to do: stop the onset of another Great Depression.
“Once we averted a depression,” said Katie Grant, a Hoyer spokeswoman, “the Recovery Act started creating and saving jobs, and a jobs bill will build on that to get Americans back to work.”
Rep. Mike Honda, D-Calif., also said, “The economic recovery package was an important step in a new direction, but we need to do more to help Americans who have lost their jobs.”
Political columnist and former presidential appointee Armstrong Williams, however, disagrees:
“A second stimulus package … sorry … ‘jobs initiative’ … is the Democrats’ attempt to give the appearance that their plan is working,” Williams writes. “They know that if the levee cracks before the 2010 midterms, they will be swept out of office, just like the 1994 U.S. midterm elections. Calling a second stimulus package a ‘jobs initiative’ doesn’t change the fact that the administration’s response to the unemployment crisis has been an economic bust. It’s hard to see how more of the same will change that.”
Tell lawmakers in Washington that if they insist on spending more, they’ll join the ranks of the unemployed, too. For just $29.95 you can send an individualized notice to every member of Congress in the form of a “pink slip.”
Last week, congressional members announced formation of the new Jobs Now! Caucus, a coalition The Hill reports is already 161 members strong.
“The purpose of the Jobs Now! Caucus is to take a stand for putting our families, our communities and our nation back to work,” states the website of Rep. Marcy Kaptur, D-Ohio, co-chairperson of the coalition. “This caucus will advocate for policy initiatives that stimulate and maintain a strong economy based on sustainable development. It will seek to achieve one common goal across the political spectrum: creating jobs again in America.”
The Hill reports the group will begin formally meeting after the Thanksgiving break and plans to come up with its own legislative proposals.
Rep. Diane Watson, D-Calif., another Jobs Now! Caucus member, said that new measures need to be focused on jobs alone.
“I think we have to do a better job of directing that money to job creation and not to a bureaucracy,” Watson told The Hill.
The how and the how much
After interviewing lawmakers, the Times reports Congress is considering a variety of ways to spur job growth: “road projects … loans to small businesses, incentives to companies that agree to manufacture products in the U.S. and special partnerships in which government tries to avert private-sector layoffs by picking up a share of employee wages.”
Rep. Candice Miller, R-Mich., a member of the Jobs Now! Caucus, floated the idea at the conference introducing the caucus of funding additional infrastructure projects. Other possibilities include tax credits for companies making new hires and extending federal unemployment benefits.
Rep. Watson told The Hill she supports increased funding for education, specifically for teachers in danger of being laid off due to tight state budgets.
The final price tag for the new stimulus plan is as nebulous as what the monies are intended to purchase.
Rep. Kaptur, for example, has said she would be open to using funds left over or not yet paid out of either Obama’s Recovery Act or Bush’s Wall Street bailout. Congressional aides told the Times some are considering a 25-cent tax on stock transactions.
Congress may even ask for additional deficit spending to fund the proposed new stimulus.
A White House official, speaking on condition of anonymity, told the Times, referring to the political peril of adding even more to the national debt, “No question that it’s a delicate balance, but there’s also no question that we’ve got to do more to address the jobs situation and to boost opportunities for middle-class families.”
House Speaker Nancy Pelosi, D-Calif., said in a conference call that if forced to choose between jobs and increased debt, the choice would be easy:
“The American people have an anger about the growth of the deficit because they’re not getting anything for it,” she reasoned.
Her implication: if Americans see additional jobs, they won’t feel the money – even money borrowed and added to the national debt – will have been wasted.
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