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The future of the jobs bill

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Derek Thompson predicts how the effort to get a bipartisan jobs bill is likely to play out:

Republicans will ask if Obama's willing to consider an across-the-board tax cut. He'll say no, because he doesn't think it will create jobs and he knows it will add significantly to the deficit. Then Republicans will say they couldn't reach a deal, Obama will have to build a job creation bill with Democrats only, and Republicans will counter every proposal with: "This is more of the same old failed policies from Democrats, who are spending our way into a bottomless hole and tragically burdening on our children with debt without doing a thing create jobs."

That will re-dig the trenches. Mainstream news will describe Congress as a partisan pit, and public opinion will begin to turn against the bill because they think Democrats are forcing legislation through, and the bill is taking too long to come together, and they don't think it will work, anyway because the press surrounding the bill will be mostly negative. Moderate Democrats will get nervous and ask to pare down the bill, which will probably make it less effective, and months later, if Democrats actually pass the weak-sauce law, it will necessarily lose Republicans, alienate independents and frustrate liberals.

So yeah, bipartisanship. Let's have at it.

Not to mention, it won't do much for jobs.

By Ezra Klein  |  February 9, 2010; 2:41 PM ET
 
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Comments

The public supports extending unemployment. The public hates the pork projects littering the stimulus package. The first guy who proposes to fund the extension of unemployment benefits by eliminating the bridges to nowhere in the stimulus package hits it out of the park.

Posted by: bgmma50 | February 9, 2010 2:53 PM | Report abuse

Is there some way to do a miniscule across the board tax cut? Didn't the President propose some tax cut for employers that hire new employees which most people described as not really that much money saved per employer but that just the idea of saving would spur on employers to hire people? Would something like that (a tax cut so small that it doesn't really save tons of money per person) have any kind of positive effect? Could he propose such a small tax cut and then effectively claim to be cooperating with Republicans?

On the other hand, Democrats should absolutely insist that Republicans should either propose ways to pay for any tax cuts or to admit publically that they support a temporary increase to the federal deficit.

Posted by: MosBen | February 9, 2010 2:54 PM | Report abuse

bgmma50, not all bridges are bridges to nowhere. Infrastructure spending is both necessary and can stimulate the local economy. I'm all for eliminating useless projects, but you have to be more specific about what types of projects count as useless pork and which are acceptable investments in local infrastructure.

The problem with the bridge to nowhere was that it was a truly unnecessary project in a way that fixing a crumbling overpass in Anchorage probably wouldn't have been.

Posted by: MosBen | February 9, 2010 2:59 PM | Report abuse

Ezra,

you were right on until you flew off the track at:

and the bill is taking too long to come together


IT IS taking way too long to come together. Republicans in their house speeches LAST SUMMER said that we needed to focus on jobs. They each reiterated and asked "WHERE ARE THE JOBS?". The administration said "Nothing to see here, unemployment won't get get past 8%, blah blah blah."

Wonder how many seats that'll cost them in November?

Posted by: visionbrkr | February 9, 2010 3:15 PM | Report abuse

visionbrkr, did Republicans propose a jobs bill last summer? I'm not trying to be snarky here. I don't think they did, and my feeling is that they were using that as a cudgle against HCR rather than engaging in the process, but I very well might have just forgotten.

You know, the minority has a hard time setting the agenda of the legislature, but they can still propose legislation and get co-sponsers, especially in this multi-media age. If Republicans wanted to draft a jobs bill, they could have then and they can now. The problem, of course, is that other than Ryan's proposal the Republicans have had a bad habit in the last year of creating proposals with no numbers or consisting solely of tax cuts.

Posted by: MosBen | February 9, 2010 3:33 PM | Report abuse

MosBen,

you have every right to be snarky if you want and no you're not.

No they didn't. But then again they haven't been in the majority (at least in the formal sense). I'm thinking back that they said that we shouldn't focus on healthcare, we should focus on jobs and Dems would have none of it. Do you really think if they proposed a "jobs package" that Dems would have heard any of it?

So in essence techincally could they have, YES.

http://www.youtube.com/watch?v=_xsqldG1huw

Posted by: visionbrkr | February 9, 2010 3:41 PM | Report abuse

MosBen, how about preserving all infrastructure spending related to the development of alternative energy or energy independence and eliminating the rest, particularly those that create government jobs that will require future taxes to maintain? Or something, anything, that would indicate that there is some method behind the madness. That we can ultimately expect a return on our investment.

Posted by: bgmma50 | February 9, 2010 3:44 PM | Report abuse

How about significant tax cuts (bigger than Bush) for everyone who earns less than $100k, or less than $250k household? And everybody who makes more than $250k has their taxes revert to pre-Bush-tax-cut form? Republicans ought to go for that.

Not that the Republicans in congress have done anything positive regarding jobs thus far, because they haven't.

Posted by: Kevin_Willis | February 9, 2010 3:51 PM | Report abuse

Derek's analysis is spot-on. And it feels so familiar, almost as if we've seen it played out several times already....

Posted by: BigTunaTim | February 9, 2010 4:02 PM | Report abuse

bgmma50, I thought something like a bridge project would create temporary jobs but not that many long term jobs, so spending on building projects like bridges, roads, etc. would be good for stimulus. Further, investing through creation of research grants helps fund things like energy research and creates temporary jobs to help in the labs in the process. I'm simply not in a position to argue for or against the creation of long term government jobs in the stimulus bill because I can't think of what they are off the top of my head.

In terms of getting a return, as far as I know most infrastructure doesn't pay for itself outside of increased economic activity. Most roads or bridges don't have tolls, but a good system for delivering goods and services can attract businesses to the area. I know that back when I lived in Washington State Boeing was constantly threatening to move manufacturing somewhere else because the traffic was so terrible between Seattle and the airport.

visionbrkr, I appreciate that a Republican jobs bill probably wouldn't have gotten far off the ground, but that doesn't absolve them from governing completely. If they thought there were other priorities that the Congress should have been addressing they are perfectly capable of writing bills and seeking sponsers to bring those bills to the relevent committees and then to the floor. I don't believe it's sufficient to say that Congress should be doing other stuff if you don't have specific other stuff that you want to do.

And again, I personally think they were more interested in scoring political points against HCR that they were actually interested in putting together a bipartisan jobs bill.

Posted by: MosBen | February 9, 2010 4:27 PM | Report abuse

Kevin,

I've never liked dollar thresholds on things like that because what's $100k in Mississippi is not $100k in NYC although I do like your idea in general. I've always preferred a percentage of income as a more fair way to get everyone to pay their fair share.

Posted by: visionbrkr | February 9, 2010 4:31 PM | Report abuse

MosBen,

I think you're right that they were trying to score (and will) politically rather than fixing healthcare but I think they honestly believe that the bills before us won't actually fix healthcare so the optimist in me thinks that's what their line of thinking was (the pessimist believes it was just for political gain).

Now whether they're right or wrong is still to be seen (and may never be seen if legislation doesn't get enacted). What I do know is that the status quo isn't working for anyone.

As far as them co-sponsoring jobs bills i'm not knowlegeable enough about the Washington political process to know if they tried or not. Maybe someone else is.

Posted by: visionbrkr | February 9, 2010 4:37 PM | Report abuse

All incumbents should be worried in 2010! The ground swell against a "do nothing" Congress has turned into a tidal wave! And, not a moment too soon! These folks has better get right with their constituencies!

vist: http://eclecticramblings.wordpress.com

Posted by: my4653 | February 9, 2010 4:40 PM | Report abuse

visionbrkr:

Nothing is perfect, but it's just a thought. I would have more objection to the dollar threshold being the same everywhere if you couldn't write off state and local taxes. A large part of the expense of NYC is the additional taxes. Still, there are general metrics for assessing the expense of living in New York City vs. Nashville. I wouldn't have an objection if those metrics were incorporated. How that would fly in congress, I don't know, but I expect it wouldn't.

I'm just suggesting slashing taxes on folks below the Democrat's arbitrary "rich" line. Not because I want to soak the rich, but given all the language about how Republicans want "tax cuts for the rich", I'd like to see them execute on the logical extension of that objection: big fat tax cuts for everybody else.

Posted by: Kevin_Willis | February 9, 2010 5:10 PM | Report abuse

No jobs bill is necessary.

Call Ben Bernanke. Tell him to reflate nominal GDP back to its long-term trend path, using 2007 nominal GDP as a starting point and using 5.5% as the trend growth rate (~$16.4 trillion for 2010 vs the ~$14.8 trillion we're likely to see). He might say no, but it would probably do more heavy lifting than anything on the fiscal side that we could reasonably expect to pass, and at far less cost.

To create permanent jobs, businesses need consistent and predictable sales growth. Job creating tax incentives won't do a whole lot - if your business isn't seeing any sales growth and you're fully staffed, why hire someone at $50,000 that costs $45,000 with the tax cut? Of course there will be marginal cases in which the tax credit pushes an employer into making a hiring decision, and if the tax credit boosts the velocity of money (and the Fed accomodates that increase in velocity - recalling that their current policy is to target inflation), then you will see some overall sales growth and more jobs created. I still think we should try the monetary route first.

Given the severity of the recession, no fix isn't going to quickly bring us back to full employment. I like bgmma50's first comment - kill a bunch of pork (popular) and shift the money to increased unemployment benefits for the next year or two (helps people directly, popular).

Posted by: justin84 | February 10, 2010 9:03 AM | Report abuse

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