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 Priorities analysis, Recession Continues to Batter State Budgets; State Responses Could Slow Recovery.)

Jobs for Main Street provides $500 million in funding for summer jobs for 250,000 youth, and extends $750 million for competitive grants for worker training and placement in high growth sectors such as renewable energy and health care through the Workforce Investment Act (WIA).  Also included are $132 million for National and Community Service, including funds for another 25,000 AmeriCorps volunteers.

The Public Housing Capital Fund is increased by $1 billion, for additional renovations and energy retrofitting, with emphasis on rehabbing vacant rental units.  The Housing Trust Fund would receive $1.065 billion to build affordable housing.

The bill also recognizes that benefits directed to low-income people both prevent severe hardship and allow for increased spending that economists say provides the biggest boost to the economy.  The Unemployment Insurance expansions and COBRA health insurance subsidy enacted through the American Recovery and Reinvestment Act (ARRA) are extended six months.  The COBRA health insurance subsidy provided is increased from 9 to 15 months.

In a step long sought by advocates for low-income children and families, the bill makes the refundable Child Tax Credit available to families starting with their first dollar of earnings (under ARRA, the Child Tax Credit was expanded to families with earnings as low as $3,000).  H.R. 2847 provides that such increases in refunds do not count in determining eligibility or benefits for federal or federal/state programs such as SNAP (food stamps) or TANF.

Getting the Senate to take up jobs legislation quickly in January will be difficult, but both bodies will need to return to the topic at least in order to continue the ARRA expansions in Unemployment Insurance, which were only extended for two months as an add-on to the Department of Defense appropriations bill (See Appropriations article).  Jobs for Main Street is seen by advocates as a good start, but will need more direct job creation if it is to address the unacceptably high levels of unemployment affecting youth, communities of color, families with children, and critically hard-hit communities in urban and rural areas.

For more information about jobs proposals aimed at assisting low-income people, see the Coalition on Human Needs jobs page. *** Need link for new site***

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