CHN: House Passes a Jobs Bill; But Final Enactment Awaits the New Year
With 10 percent unemployment, there were hopes Congress could take quick action to invest in job creation before the end of 2009. Contentiousness in the Senate over health care and pretty much everything else made it impossible for the Senate to take up jobs legislation so quickly, but the House enacted the Jobs for Main Street Act of 2010 (H.R. 2847) on December 15. The House bill includes important elements needed to spur job growth, although many economists believe its scale ($154 billion) is insufficient to address the nation’s critical job shortage.
The bill passed with a narrow 217-212 majority, with all Republicans and 38 Democrats in opposition (see roll call vote). The closeness of the vote underscores the conflicted economic concerns in Congress: recognition of the need to do more to spur job growth and fears that such action will worsen the deficit. But with economists at the Center for Economic and Policy Research projecting $1 trillion in lost wages and salaries over the next five years, it is clear that leaving unemployment unchecked will in itself make the deficit worse. (See CEPR paper, The $1 Trillion Wage Deficit.)
Jobs for Main Street includes just under $50 billion in infrastructure projects related mainly to transportation but also including Energy Innovation Loans ($2 billion) and School Renovation Grants ($4.1 billion). These projects are paid for by using surplus TARP funds (Troubled Assets Relief Program, enacted to bail out the financial industry).
The legislation also provides some relief for states struggling under recession-induced budget gaps, with $23 billion to protect or expand education jobs over FYs 2010-2011 and $23.5 billion to continue increased federal payments for Medicaid (“FMAP”) through June 2011. While a welcome step, states are now grappling with the largest cumulative budget shortfalls on record ($190 billion projected for FY 2010, or 28 percent of states’ general fund budgets). Without more aid, states are bound to accelerate damaging rounds of layoffs and service cuts – exactly what the recovery does not need. (See Center on Budget and Policy Pri