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Now that the new health care law is passed, Democrats are hoping to focus on jobs and the economy. Members of Congress and progressive organizations have begun talking more about the Local Jobs For America Act. It is a good bill that should actually help to create and save jobs while temporarily helping to ease the crushing financial shortfalls faced by the states. Also, the bill has the added benefit of containing the word “Job” in the title.
The question, of course, turns to whether Democrats can pass this bill without needing to effectively gut it to make Olympia Snowe (R-ME), Susan Collins (R-ME), and Ben Nelson (R-NE) happy so that it can overcome a filibuster. It is possible Democrats might be able to get some bipartisan support for the bill, but I believe the only way Democrats can guarantee passage is by using reconciliation. That is why it is critical progressives focus on adding reconciliation instructions that could be used for it in the upcoming budget resolution.
Should Democrats use reconciliation to pass the Local Jobs For America Act?
There are three important reasons why Democrats should leave themselves the option to pass the Local Jobs for America Act, even if it means passing it on a party line vote.
1) Politics
What is really killing Democrats heading into November is the poor economy and the 10% unemployment rate. If the economy stays bad, Democrats are sunk. I think any political damage possibly done by even more Republican screaming about partisanship and deficits would pale in comparison to the political upside of a bill that could noticeably bring the unemployment rate down.
It already looks like the economy is very slowly adding jobs. If Democrats pass a bill with the word “jobs” in the title over Republicans obstructionism, and unemployment starts going down, a well-run campaign (I know, a near impossibility for Democrats) should be able to capitalize on the optics.
2) Negotiation power
It is possible that Democrats can actually get sufficient bipartisan support for the bill so that it could overcome a filibuster without crippling the legislation, but if Democrats include reconciliation instructions in the budget, it gives them a much better bargaining position. Making it clear that they can pass a bill without any Republican input or ideas gives Republicans a great incentive to buy in, since they know lockstep obstructionism wouldn’t be able to bring down the bill.
3) Moral
Last but not least is the moral issue. There are millions of Americans seriously suffering as a result of this economic downturn. I’m not an economic expert, but I at least know many prominent Congressional Democrats believe this bill would help a large number of their constituents. If Democrats think this bill will help, but for political reasons are unwilling to use every tool at their disposal to pass it, then they don’t deserve to stay a majority party.
Could reconciliation be used for the Local Jobs for America Act?
A cursory reading of the bill leaves me to think that most of it will not violate the Byrd rule and/or the bill could easily be rewritten to be Byrd-proof while maintaining the general spirit of the original. Since the bill consists basically of large grants to the states, most of it is clearly budget related.
The one problem is the issue of funding. Traditionally, reconciliation bills have mainly been used to reduce the deficit. Something deficit peacocks like Kent Conrad (D-ND) might insist on. Finding $100 billion in funding might not be easy and could endanger the whole bill.
Democrats don’t actually need to make the reconciliation bill a deficit reducer. They do have the option of following the example set by Republicans and making the reconciliation instructions to increase the deficit. This is how Republicans were able to pass their deficit-increasing Bush tax cuts using reconciliation. While including deficit increasing reconciliation instructions is sure raise some hackles, it seems a small price to pay to show Americans that Democrats are serious about trying to tackle unemployment.
A goal and the means, but what about the will?
Democrats have a goal; reduce unemployment and deal with hardships resulting from the economic downturn. They have the means to help achieve that goal: passing the Local Jobs for America Act, using reconciliation, if need be. The only question is do Congressional Democrats have the political will to use every possible tool to deal with joblessness? We will know soon enough if they include reconciliation instructions in the budget resolution.
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Fund it with a “Wall Street” (transaction) tax.
love the idea
Me too.
In fact I think the transaction tax was projected to bring in around $100 billion. Of course you can pay for it with say a strong public option saving $115 billion.
They have the opportunity but they won’t. It wouldn’t be “bipartisan”.
Biggest problem with this is that you’d have to wait until probably October to pass it, under this strategy.
The AFL-CIO’s original jobs plan contained a financial transaction tax, time-released three years out so that the stimulative impact of this spending would not be diluted.
Jon, your piece makes the assumption that there are Democrats somewhere in
Washington. I have seen no evidence of such. Recent legislation and conduct convinces me there are only corporate fascists.
Do the D’s have the political will to use every possible tool? You wore a sarcastic smile when you wrote that, right?
You can pass it a bit quicker than that The Jobs and Growth Tax Relief
Reconciliation Act of 2003 was passed in April of 2003.
many reconciliation bills are signed into law in August of the same year.
http://budget.house.gov/crs-reports/RL30862.pdf
Another good read, thanks for the info and update Jon . . . . this country needs jobs, badly.
Unlikely to happen. The Dems only use reconciliation for things that benefit the big corporations.
In fairness the student loan reform did stick it to the student loan providers to help low income students.
no way (although i love the idea of a transaction tax for it’s own sake). we need more deficit spending, which is why i don’t think the bill should be funded at all. no need to fund it with either taxes or borrowing (especially now that the fed is paying interest on reserves).
fund it with deficit spending (and make it much bigger – as wray, auerback, mosler, el al. are recommending). yeah, i know, i’m dreaming.
As for the last argument, “the moral issue”, this hasn’t played well in American since the ’70′s, unless you count all the hand-wringing and tender-violent concern over someone else’s fetus.
Oh, and gay bashing for jesus. “Morality” to most Americans has to do with somebody else’s sex life, not the suffering of their neighbors.
might as well dream big. But you notice I did not suggest funding the thing either.
Why not fund it?
Just thinking out loud, it appears the act mostly protects state/local workers plus some training, and while those are worthy jobs to protect and backfill and train, why not create some more?
So how about they double the targeted amount of jobs, to include some needed infrastructure, and instead of funding the resultant $150B, fund the infrastructure part by the original $75B cost, via a transfer from Wall Street to Main Street?
That could play out very nicely IMO.
Jon, Your blogs are always interesting. But what the Democrats ought to do immediately is to use the nuclear option, get rid of the filibuster, and pass whatever they can pass by majority vote. The we can evaluate them in the Fall based on what they pass or fail to pass.
The jobs bill that the Senate passed got 11 republican votes. Republicans might complain but in the end, this issue is too important to voters for the GOP to hold the line. Obama and the Democratic leadership can afford to be more bold on jobs as well as financial reform.
There can be only one reconciliation bill each year.
http://www.nytimes.com/2010/03/23/us/politics/23obama.html
I was glad to see student loan reform pass. I was in school in the late ’70′s – early ’80′s. What used to be a trip to the bursar’s office to pick up my loans became a trip to the bank under Reagan, so his banker buddies could take their cut for “massaging the documents”.
That makes too much sense
Ryan Grim poses an absurd argument on Huff. Post that a “BATTLE” between Progressives & Blue Dogs for the “soul” of the Democratic Party is about to begin. Hilarious!
Progressives had a once in 30 year opportunity to make a crucial ideological stand on HCR for the “soul” of the Party. They acted like submissive puppydogs who hadn’t eaten in a week.
The Dem. Party has no soul, no ideals, no fight left for the people who elected them.
The local jobs “debate” ploy is a charade to dole out crumbs to Progressives (IF they show they can make their followers heel). Progressives are perilously clinging to the bottom rung of the ladder as if falling from here would be catastrophic. As evidenced by the HCR votes, there isnot one Progressive in Washington D.C. They’re as shameful as the rest. EVERY Democrat in Washington D.C. who’s up for reelection in ’10 & ’12 should be soundly defeated – I don’t care how inept or corrupt her/his opponent!
Why do they have so much disdain for their kids & grandkids?
I like it too…So on the question of jobs and congress, i’d love to get involved pressuring politicians to do more to put American’s to work in well paying permanent jobs. Where to start? I’ve been emailing my reps but .. well.. i feel like i’m shouting at the wall when I do that.
Hey Jon,
Sorry for the late hit (alas, sometimes work gets in the way of web surfing)… Three ways to raise revenue without raising income or payroll taxes–
1. Transaction tax; though increasing the “Wall Street” transaction tax is small ball, better to impose a transaction tax on everything that passes through the Federal Reserve system (including financial market clearings). For example, UW-Madison Economics Professor Edgar Feige presented his Automated Payment Transaction (APT) tax to Bush’s tax reform panel 5 years ago. A rate of roughly one half of one percent would raise, in 2002 dollars, $1.8 trillion a year (get the camel’s nose in the tent with a low rate that raises a tiny fraction of that amount and then come back later to raise the APT rate to replace payroll and income taxes).
http://www.scribd.com/doc/25299549/Feige-APT-Presentation-to-Tax-Reform-Panel-2005
2. Tax unrealized capital gains. With minor exceptions (mutual fund holdings, futures trading accounts), capital gains taxes aren’t assessed until the property is sold. If a taxpayer holds the property until their death, their devisees or heirs get a stepped-up capital gains taxes and will owe no taxes on the unrealized gains. Surprisingly, supply side economist Arthur Laffer includes unrealized capital gains taxation in his most recent flat tax iteration (most flat tax plans exempt all capital from taxation).
http://moslereconomics.com/2010/03/26/us-taxes/#comment-17780
3. Adopt Len Burman’s tax expenditure freeze proposal. That would raise (or rather, save) $3.5 trillion over 10 years.
http://www.washingtonpost.com/wp-dyn/content/article/2010/02/01/AR2010020103072.html
Finally, if the purpose of the bill is to “ease the crushing financial shortfalls faced by the states”, then this is yet another argument for a single payer healthcare system. This bill would provide $23 billion this year in federal assistance to state governments, A federal Medicare for All system would zero out the States’ $165 billion a year (and rising faster than inflation) obligation to fund their share of Medicaid spending.
I should add that the States’ financial crunch is yet another argument for a single payer healthcare system.
This bill would provide $23 billion a year in federal assistance to State budgets. However, a federal Medicare for All system would allow the States to zero out the $165 billion a year they currently spend on their share of Medicaid funding.