By Jim Snyder and Silla Brush - 01/27/10 02:55 PM EST
An $80 billion “jobs package” under consideration in the Senate is stimulating a lobbying rush for federal dollars before the administration tries to cap spending.
Transit and high-speed rail advocates, teachers, community bankers, credit unions and business trade groups are seeking spending and tax provisions in the package, which Democrats hope will revive the economy and improve their electoral prospects after a string of defeats at the polls.
At $80 billion instead of $787 billion, the new package is much smaller. It also puts greater emphasis on tax cuts to encourage businesses to hire more workers to bring the unemployment rate below 10 percent.
One of the largest components will likely be a job hiring tax credit, which a draft summary of the bill pegged at $20 billion. The tax credit discussion has spurred a lengthy debate about how to design it so that employers do not abuse the system.
Several industries and advocacy groups also stand to gain from the new jobs bill, and there is no shortage of ideas about how the money should be spent. The push comes on the heels of President Barack Obama’s stated goal of a three-year freeze in domestic spending to reduce the federal debt. Such an effort is likely to make competition for federal dollars even fiercer and is driving some of the push to have projects added to the jobs package now under consideration.
Transit and high-speed rail advocates are cheering the prospect of another $10 billion in federal funds for public transportation projects. That builds on the $16 billion Congress appropriated in the American Recovery and Reinvestment Act, the earlier $787 billion stimulus package.
“If high-speed rail is going to be meaningful at all, we have to keep putting resources into it,” said David Goldberg, a spokesman for Transportation for America, a group that lobbies for transit and high-speed rail projects.
The outline includes $2.5 billion for intercity and high-speed rail, and another $7.5 billion for transit programs. It also includes $14 billion for highways.
Transportation for America (T4) is lobbying senators to let local transit agencies use the federal dollars as they see fit. Now the money would go to capital expenditures, like purchasing new buses or rail cars. However, local governments have been forced to lay off thousands of workers as their revenues dropped sharply in the recession, Goldberg said.
The transportation group says some of the money should go to operating budgets, traditionally paid for by local governments. The stimulus package last year allowed governments to spend as much as 10 percent of the money they received on operating expenses — hiring back bus drivers, for instance. The House jobs package passed in December allows for the same flexibility, but it isn’t clear that the Senate will follow suit.
The transportation group also wants Congress to appropriate more Transportation Investment Generating Economic Recovery (Tiger) grants, which are given to innovative transportation projects. The first stimulus package included $1.5 billion for the budget line, which prompted $59 billion in requests for funding. T4 is hoping the jobs package will include another $3 billion.
Banks are also lobbying for favored provisions. The Independent Community Bankers of America (ICBA) has been pushing for new programs and additional money to help boost lending to small businesses. The new jobs package could extend and expand programs run by the Small Business Administration that provide incentive for banks to lend. For months, the White House and congressional lawmakers have been debating ways to boost bank lending to big and small businesses.
Steve Verdier, executive vice president at ICBA, said bankers are concerned about whether the increased money for lending comes with the type of restrictions and documentation requirements that banks faced when they participated in the $700 billion bailout program.
“If the idea is to beat up on the banks, that’s one thing,” Verdier said. “If the idea is to help small business, that’s another thing.”
Meanwhile, the Credit Union National Association (CUNA) and National Association of Federal Credit Unions (NAFCU) continue to lobby for a long-fought increase in the member business lending cap. The credit unions argue the additional lending would help support job-creation particularly for small businesses, and they are pushing for it to be included in the jobs bill.
The bank lobby and credit unions have clashed repeatedly over the years on the lending cap provision. Credit union groups were buoyed this year when Sens. Mark Udall (D-Colo.), Charles Schumer (D-N.Y.), Joe Lieberman (I-Conn.), Olympia Snowe (R-Maine), Barbara Boxer (D-Calif.), Susan Collins (R-Maine) and Kirsten Gillibrand (D-N.Y.) introduced legislation supporting the increase.
The industry clash would start a political fight that the Senate may not want to wage on the jobs bill
High-tech companies are focusing their efforts to support inclusion of a “green bank” proposal pushed by Sen. Jeff Bingaman (D-N.M.) to help develop emerging clean-energy technologies.
An energy bill crafted by Bingaman’s Energy and Natural Resources Committee in 2009 included money for the Clean Energy Development Administration (CEDA), which would help finance clean-tech projects.
Google, Tesla Motors and some Silicon Valley investment funds wrote the administration last week urging that it push for the clean-energy bank in a jobs bill. They favor Bingaman’s approach rather than a competing version in the jobs legislation that the House passed in December.
The Senate version favors “innovative” technologies versus those that are “commercially deployable.”
“We believe the availability of CEDA financing will help America’s emerging clean energy technology companies cross the so-called ‘valley of death’ between the invention of a technology and its commercial deployment,” 13 executives wrote the White House last week.