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Democrats work on multibillion-dollar jobs package

Lawmakers say they're moving fast to get a job-creation bill to Obama by January. It's unclear how much of the effort would be funded with deficit spending.

November 27, 2009|By Peter Nicholas
  • People line up at a job fair in Michigan. Congress is considering small-business loans, money for road projects and other ideas for a bill to combat rising unemployment.
People line up at a job fair in Michigan. Congress is considering small-business… (Paul Sancya / Associated…)

Reporting from Washington — Troubled by the rising jobless rate, President Obama and the Democratic majority in Congress are assembling a new jobs package that would devote billions of dollars to projects meant to put people back on payrolls in 2010 and keep them working.

Discussions over the scale of the bill are fluid, but lawmakers said the intent was to move swiftly and get a bill to Obama's desk as early as January.

The renewed push to create jobs is driven by a recognition that the $787-billion stimulus program enacted in February is not a sufficient remedy for an unemployment rate that stands at 10.2%.

Nearly 16 million people were unemployed as of October, and 3.49 million jobs have been lost since January, when Obama took office, according to the Bureau of Labor Statistics.

The stimulus boosted employment but "did it in a way that was not as highly visible as a lot of people would like," said Rep. Betty Sutton (D-Ohio), one of the House members devising the jobs bill.

"It did so in somewhat of a scattershot approach -- a job here and a job there, trickled out over time. . . . Far too many Americans are without a job, and far too many more are worried about what tomorrow is going to bring," Sutton said.

Congressional aides said the new program could cost tens of billions of dollars. Democratic House members who had wanted a larger stimulus said they would press for a substantial spending plan this time.

"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-Oakland), who chairs the Congressional Black Caucus. "We have to create jobs, and we have to create them right away."

Lawmakers are considering myriad ways to accelerate job growth. In interviews, they mentioned road projects that can be counted on to employ people right away, loans to small businesses, incentives for 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.

House members are also considering a plan to funnel aid to state and local governments with the assurance the money would be used to preserve jobs. Senate aides said the jobs plan would give priority to labor-intensive "brick-and-mortar" projects.

It is unclear how much of the effort would be financed through deficit spending. Rising deficits are becoming an increasing source of worry. This year, the deficit is projected to be $1.58 trillion.

Covering costs

Faced with so much red ink, lawmakers are exploring various payment mechanisms. Congressional aides said they might tap money left over from the fund used to bail out financial institutions. Other approaches include a 25-cent tax on each stock transaction, though Treasury Secretary Timothy F. Geithner has expressed reservations about that idea.

Even if the plan inflates the deficit in the near term, the White House appears willing to accept that if the payoff is more jobs.

Asked if the deficit constrains the administration's options, one White House official, speaking on condition of anonymity, said: "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-San Francisco) said this week that if the public were given a choice between a job and an uptick in the deficit, the answer would be easy.

"The American people have an anger about the growth of the deficit because they're not getting anything for it," she said in a conference call with bloggers and economists.

Bipartisan support appears to be absent. House Minority Whip Eric Cantor (R-Va.) said the stimulus should sour people on costly jobs programs: "The case must be made as to why you want to borrow money we don't have. And how do you make that case given the track record of the failed stimulus bill?"

Discussions about job creation are playing out in both the House and Senate.

On the Senate side, Richard J. Durbin (D-Ill.) and Byron L. Dorgan (D-N.D.) are heading the effort and have presided over multiple meetings with colleagues.

The House hopes to pass a jobs bill in December. Senate aides say it is doubtful the measure would be enacted until a healthcare bill is passed, perhaps by the time Obama delivers his State of the Union address in January.

A growing priority

Administration aides are talking to lawmakers about the bill and cooperating with the project. One imperative from the White House is that the bill be purged of wasteful pork projects.

"Folks who have their jobs face a level of insecurity that is unacceptably high from the administration's perspective," said the White House official. "So the president has tasked us to generate ideas and work with Congress on future job-growth measures."

Having been preoccupied with passing a healthcare bill, the White House is eager to demonstrate it is sensitive to the economic hardship Americans face. To that end, the White House will host a jobs summit Thursday. And the next day, Obama will travel to Allentown, Pa. -- the first stop in a kind of economic "listening tour."

Polling shows that the healthcare overhaul is not as important to Americans as an economic recovery that yields jobs. With a midterm election next year, Democrats in control of the White House and Congress can't afford to look out of touch.

A Senate Democratic aide, speaking on condition of anonymity, said, "Democrats have to address the No. 1 concern of their constituents -- and that is, by a long shot, jobs.

"We want to show we get it -- that we're responsible and in tune."

peter.nicholas@latimes.com

Jim Puzzanghera in the Washington bureau contributed to this report.

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