By Walter Alarkon - 11/24/09 11:00 AM EST
Double-digit unemployment and acknowledgment that the $787 billion stimulus hasn’t done enough to create work has fueled Democratic momentum for a new jobs initiative.
House Democrats are hesitant to label the new legislation another stimulus ahead of the December debate.
Their resistance to calling the new jobs package a “stimulus” also comes as Republicans continue to blast the $787 billion program as wasteful and as voters rank the economy at the top of their concerns ahead of the 2010 midterms.
“I hesitate to call it a name, but we’re calling our caucus a ‘jobs caucus,’ ” said Rep. Marcy Kaptur (D-Ohio), the co-chairwoman of a bipartisan Congressional Jobs Now Caucus, which was announced last week and now has 161 House members.
Kaptur said Congress has not spent enough time this year on job creation.
“Remember, we’ve had many other issues this year, and this has not got the kind of focus members have been hoping for,” she said.
Most of the stimulus has yet to be spent. The government, as of the end of September, had paid out $136 billion of $499 billion in stimulus spending, according to the Obama administration’s stimulus tracking website, Recovery.gov. Nearly $84 billion of the $288 billion in stimulus tax cuts has been paid out.
Democrats in both chambers are considering new small-business loan programs, hiring tax credits and infrastructure investments. There is also a desire to extend federal unemployment benefits for the coming year.
Kaptur, Rep. Candice Miller (R-Mich.) and Rep. Bobby Rush (D-Ill.), the top three members of the Jobs Now Caucus, have all said they’re open to using some of the roughly $600 billion left in stimulus money for new programs targeted specifically for job creation.
Miller floated the proposal during a news conference last week introducing the caucus. Miller supports redirecting stimulus funds toward more infrastructure projects. When asked about using remaining stimulus money, Rush, the group’s chairman, said that the caucus would consider that idea along with others. Kaptur said she would be open to using any funds left over from the stimulus or the $700 billion Wall Street bailout.
The group will begin formally meeting after the Thanksgiving break and plans to come up with its own legislative proposals.
Gene Dodaro, head of the Government Accountability Office, told House members last week that he expects just half of the stimulus money to be paid out by the middle of next year.
Rep. Diane Watson (D-Calif.), another Jobs Now Caucus member, said that new measures need to be focused on jobs alone.
“I think we have to do a better job of directing that money to job creation and not to a bureaucracy,” Watson told The Hill.
She supports increased funding for education, specifically for teachers in danger of being laid off due to tight state budgets.
Official reports from states and other stimulus beneficiaries found that 640,329 jobs have been directly saved or created as a result of stimulus projects. That number rises to 1 million jobs or more when accounting for the indirect economic impact of tax cuts and spending, White House and independent economists from Moody’s and the Congressional Budget Office have said.
White House economists said in January that the jobless rate would peak at about 8 percent if the stimulus were to be enacted. Without the stimulus, the jobless rate would peak at about 9 percent, the White House economists said in the build-up to passing the measure.
But the unemployment rate reached 10.2 percent in October, and the National Association for Business Economics released a report Monday predicting that the jobless rate wouldn’t start falling until the second quarter of next year.
Republicans have tried to cast doubt on the stimulus jobs number and have seized on the high unemployment rate to argue that Democrats are ineffective stewards of the economy.
Rep. Darrell Issa (Calif.), the top Republican on the House Oversight and Government Reform Committee, made note of news reports last week finding stimulus jobs in congressional districts that don’t exist and other reporting flaws.
“The fact is, they have no idea how many jobs have been saved or created,” Issa said.
House Democratic leaders and the White House have defended the stimulus while acknowledging that more needs to be done about the struggling job market.
An aide to House Majority Leader Steny Hoyer (D-Md.) said that the $787 billion package did what it set out to do: stop the economic downturn from pulling the nation into another Great Depression.”
“Once we averted a depression, the Recovery Act started creating and saving jobs, and a jobs bill will build on that to get Americans back to work,” said Katie Grant, a Hoyer spokeswoman.
Hoyer said last week that he wants a vote on a jobs bill before the December holiday recess.
President Barack Obama and the White House have touted the effect of the stimulus on economic growth. The gross domestic product grew in the third quarter for the first time since 2007, rising by an annualized rate of 3.5 percent, according to preliminary estimates. White House and independent economists have attributed the growth to stimulus spending.
But the White House has also signaled that it plans to find ways outside of the stimulus to spur job growth. Obama has scheduled a jobs summit for Dec. 3.
During remarks after a Cabinet meeting Monday, the president credited stimulus tax cuts, infrastructure investments and state aid with creating economic growth, which he said was needed for job growth.
“But, having said that, what I emphasize today is we cannot sit back and be satisfied, given the extraordinarily high unemployment levels that we’ve seen,” Obama said. “We have only taken the first step in curing our economy and making sure that it is moving on the right track.”