By Alexander Bolton - 02/09/11 11:04 AM EST
“I don’t know what we’ll do next,” said Senate Democratic Whip Dick Durbin (Ill.).
The No. 2 Democrat in the Senate on Tuesday conceded that his party faces a dilemma as it tries to come up with a legislative agenda to create jobs amid a new political environment dominated by talk of cutting spending and reducing the deficit.
But a midterm-election drubbing wiped out the Democratic majority in the House and left the party with only a slim advantage in the Senate. Now the party must find common ground with a new GOP House majority that has ruled out new spending as it works to cut billions from the budget.
Senate Democrats will meet at a retreat in Virginia this week to try and sort through their predicament.
Several of the low-cost jobs proposals that have floated in recent weeks are considered either too liberal or too Republican for many mainstream Democrats.
Liberals have offered protectionist proposals, such as requiring that the vast majority of goods purchased by the federal government be manufactured domestically.
Republicans have called for rolling back layers of regulation they argue have stifled the private sector.
And recent Democratic proposals to create jobs by investing heavily in infrastructure and green technology would face staunch GOP opposition.
That leaves Democrats uncertain about what jobs bills will come to the Senate floor after the Federal Aviation Administration authorization.
Durbin said it will be a difficult enough challenge to preserve existing government programs aimed at creating jobs at a time when Republicans are calling for drastic spending cuts.
“It’s a serious challenge, because if we’re going to make the steep cuts in spending, we’ve got to be careful we don’t cut education and opportunities for job creation,” Durbin said. “One of the areas I watch closely is the Small Business Administration. If we make some of the cuts that have been proposed, we will be eliminating credit for smaller businesses.”
Senators across the Democratic Conference say they don’t know what course their leaders will take to lower persistently high national unemployment figures.
Different lawmakers have different ideas.
“The jobs agenda consists in part with how we deal with reducing the corporate income tax and what we do to rein in the proliferation of rules and regulations by both the executive branch agencies, the alphabet agencies and also the independent agencies,” said Sen. Ben Nelson (D-Neb.).
Nelson called for increased global trade and “getting these trade agreements through so that we can export more products and not just import.”
Nelson said he had not yet heard of a definitive agenda from his leaders.
Sen. Bernie Sanders (Vt.), an Independent who caucuses with Democrats, said he was “not quite sure” how to put together a credible jobs agenda without spending money.
“One of the areas you want to focus on, and I hope and expect the president will be talking about, is infrastructure,” said Sanders. “You have a crumbling infrastructure where over a period of years we need to spend trillions of dollars. When you do that you create jobs.”
Sanders called for investment in infrastructure and “sustainable energy and energy efficiency,” which he called “good for the country.”
“It creates jobs as well,” said Sanders, who was not aware of what Democratic leaders would decide.
Senate Finance Committee Chairman Max Baucus (D-Mont.) told members of his panel Tuesday that he planned to hold multiple hearings on how to use the tax policy to encourage businesses to expand.
That tack would be welcomed by Republicans, but liberal Democrats who still feel the sting of an $850 billion tax-cut package Obama crafted with GOP leaders are skeptical about additional cuts.
Obama sent mixed signals about his preferred jobs agenda during a speech to the U.S. Chamber of Commerce on Monday.
In a nod to Baucus and Nelson, Obama made the case for eliminating unneeded regulations and simplifying the tax code.
But the president also praised Chamber President Tom Donohue and the AFL-CIO for backing increased infrastructure spending, the priority of liberals like Sanders. Sen. Maria Cantwell (D-Wash.), a member of the Finance Committee, said the jobs agenda would get hashed out at a Senate Democratic retreat that will take place this week at the Boar’s Head Inn in Charlottesville, Va.
“We’re going to have a discussion of everything from tax policy to investment to job training, all those things that play a component [in job creation],” Cantwell said.
Republicans have pounced on Senate Democrats for lacking an agenda while the House has already passed a stream of proposals, including Obama’s healthcare reform law.
“Do they have a jobs agenda? Tell me what it is,” said Sen. Chuck Grassley (R-Iowa).
Democratic aides deny that Senate Majority Leader Harry Reid (D-Nev.) and other leaders are struggling to create a jobs agenda that can win consensus support from their conference.
A senior Democratic aide said a deliberate decision was made to postpone discussion of the agenda until after Obama’s State of the Union address on Jan. 25.
Democratic leaders also focused their attention on forging an agreement with Senate Republican Leader Mitch McConnell (Ky.) to reduce the number of times filibusters are used to slow business.
“We will announce an agenda that will fit with the president’s vision, articulated during the State of the Union, of winning the future by out-educating, out-innovating and out-building,” said the aide. “We’ll release a full list of them after the retreat.”
The specifics of the agenda, however, have stayed secret.
Democratic leaders could try to address calls from the left for more infrastructure investment by advancing a multiyear extension of the transportation authorization law, legislation that has traditionally passed with broad bipartisan support.
It remains to be seen whether Democrats would move a bill entirely paid for from the national highway trust fund or one that would add to the deficit.
Sen. Tom Carper (D-Del.) and former Sen. George Voinovich (R-Ohio) last year proposed raising the gas tax 25 cents per gallon to pay for the dwindling trust fund.
Voinovich estimated the proposal would create as many as 775,000 new jobs.
But proposals to raise taxes to create jobs will fall flat with even the most centrist Republicans.
Sen. Olympia Snowe (R-Maine) said Tuesday she would oppose legislation that increased taxes.
“It contradicts what we’ve done in continuing the tax rates for the next two years,” said Snowe. “That’s not what we should be doing.”