By Walter Alarkon - 12/03/09 11:00 AM EST
The cost of a new jobs bill Democrats hope to move early next year runs to nearly $300 billion when major proposals under serious consideration are added up.
Lawmakers are calling for extending aid to the unemployed, infrastructure spending, a hiring tax credit and increased small business loans.
Aides cautioned that Democratic leaders in both chambers are just beginning to consider what will go into the bill, and that estimates based on standalone bills may not mesh with the final jobs legislation.
But $300 billion would appear to represent an outlier of the cost of a new jobs bill. It would follow the $787 billion economic stimulus package approved earlier this year, which Democrats credit with saving jobs but Republicans criticize for failing to stem unemployment, which now stands at 10.2 percent.
The Hill arrived at the $300 billion figure by adding up the following provisions:
Lawmakers are looking to extend unemployment insurance and COBRA healthcare benefits for the unemployed through 2010 at a cost of $100 billion alone, according to the sponsor of House legislation, Rep. Jim McDermott (D-Wash.).
House Transportation and Infrastructure Committee Chairman Jim Oberstar (D-Minn.) and Rep. Peter DeFazio (D-Ore.) pushed Wednesday for $69 billion for highway and transit projects that could be started almost immediately with funding. Oberstar had criticized the earlier stimulus bill for not including enough infrastructure spending, and House Speaker Nancy Pelosi (D-Calif.), House Appropriations Committee Chairman David Obey (D-Wis.) and Sen. Kent Conrad (D-N.D.) have voiced support for more infrastructure spending to create jobs.
Democrats would also increase loans from the Small Business Administration (SBA) at a cost of $20 billion, according to Zandi.
He called for raising limits for the SBA loans, removing the interest rate cap on them in order to allow credit to be given more freely and using leftover bank bailout money as small-business credit.
Tax credits for businesses that hire new full-time workers would cost about $27 billion under a proposal by Sen. Russ Feingold (D-Wis.) and the Economic Policy Institute, a left-leaning policy group. A new hiring tax credit has received extensive discussion and is under consideration by President Barack Obama, according to his economic team.
Providing more aid to states, a move to stem further job losses, also has support among lawmakers, The New Republic reported Tuesday. Zandi, noting that the state governments will have a $150 billion budget shortfall in fiscal 2011, has called for $75 billion in federal aid for states.
A federal work-share program backed by Sen. Jack Reed (D-R.I.) and four other Democrats would cost about $600 million.
The total cost of all of those proposals would be $291.6 billion.
Zandi has called for a $230 billion job-creation package that includes the small-business loans, state fiscal aid, hiring tax credit, work-share program, unemployment and COBRA insurance and state fiscal aid. His cost estimates for most of the programs are similar to those given by lawmakers.
Adding the Oberstar-DeFazio infrastructure proposal to that sum would bring the total to $299 billion.
The $230 billion package backed by Zandi would lower the unemployment rate by 0.7 percent by the end of next year and would save or create 1.3 million jobs, according to his estimates. The Obama administration has said that the jobless rate will average more than 9 percent in 2010 and more than 8 percent in 2011.
Though the proposals are under serious consideration by some Democrats, there’s no guarantee that all or any of them will end up in the final jobs bill.
Democratic leaders could choose a smaller package, and they could choose something larger.
“We don’t have a cost of the bill,” a Senate Democratic aide said. “We are trying to get the policy right. We feel like we are getting to a place where we are truly vetting proposals.”
Sen. Byron Dorgan (D-N.D.), who is crafting the Senate bill with Majority Whip Dick Durbin (D-Ill.), said Tuesday that 121 different proposals are under consideration. A Dorgan aide said that the upper chamber won’t get to the jobs legislation until after work on the healthcare reform bill.
Lawmakers also have yet to decide whether they’ll pay for a jobs bill with tax increases or cuts to other government spending. The $787 billion stimulus was considered emergency spending and was not offset, but some Democrats say the new bill should be paid for given last year’s record budget deficit and growing public debt.
“We would hope that most but not all of it would be paid for,” the Senate aide said. “I can’t tell you that until we have a bill or package.”