Sen. Kent Conrad open to using Wall Street bailout to pay for jobs package

Sen. Kent Conrad open to using Wall Street bailout to pay for jobs package

Sen. Kent Conrad (D-N.D.) said on Monday he would be open to using money from the $700 billion Wall Street bailout to pay for a jobs package.

But the Senate Budget Committee chairman said his support is conditioned on securing a promise from leaders to create a deficit reduction task force, which Speaker Nancy Pelosi (D-Calif.) and other House Democrats have strongly opposed.


Conrad’s backing for tapping funds from the Troubled Asset Relief Program (TARP) would give Democrats more leeway to move quickly on a job-creation bill that leaders view as crucial to combating dwindling poll numbers heading into an election year.

Until now, Conrad has joined Republicans on insisting that unused TARP money go toward paying down the deficit. But he said he could be persuaded to back using the money for the jobs bill if Democrats commit to the independent panel.

“The package would have to include a process to deal with the debt,” he said, referring to the jobs package. “Negotiations are under way. We would like a task force or commission with the power to come up with a [debt reduction] plan and for the plan to come up for a vote.Democrats are scrambling to pass the most ambitious jobs bill possible before the end of the year.

At the least, Democratic leaders plan to pass what they call a “safety net” bill before Congress adjourns for Christmas. The legislation would include an extension of unemployment benefits, government-subsidized health insurance and food stamp assistance.

But growing public concern has put pressure on Democrats to allocate tens of billions of dollars for new infrastructure projects in the next two and a half weeks.

“If we wait until spring, we miss part or all of the construction season,” said Senate Democratic Whip Dick DurbinDick DurbinCOVID-19: US should help Africa, or China will GOP warns McConnell won't blink on debt cliff The Hill's Morning Report - Presented by Alibaba - Government shutdown fears increase as leaders dig in MORE (Ill.), who is participating in bicameral talks over a jobs bill.

The push to pass as robust a jobs bill as possible in the next few weeks comes as Democratic polling shows voters growing impatient with the party’s handling of the economy. President Barack ObamaBarack Hussein ObamaTo Build Back Better, improving Black women's health is a must Rahm Emanuel has earned M since leaving Chicago's city hall: report 60 years after the Peace Corps, service still brings Americans together MORE’s approval rating fell below 50 percent last month as unemployment rose into double digits.

But passage of legislation that would create jobs next year is extremely difficult because of the crush of priorities competing for floor time at the end of the year. The Senate is tied up in debating a complex, 2,074-page healthcare bill. The chamber must also pass legislation funding the federal government once a stopgap measure runs out on Dec. 18 and approve a measure to raise the national debt ceiling.

Senate Democrats say they expect Obama to call for a package of job-creating proposals at a Brookings Institution speech on Tuesday, including a proposal to loosen the flow of credit to small businesses, provide tax incentives for hiring new employees and increase infrastructure spending.

Durbin and Senate Democratic Policy Committee Chairman Byron Dorgan (N.D.) held meetings on the job package over the weekend, and Durbin met with House Education and Labor Committee Chairman George Miller (D-Calif.) late last week. Miller is spearheading jobs-bill talks in the lower chamber.

Durbin said Monday the small-business credit plan and tax incentives would likely have to wait until next year, but lawmakers hope to approve the safety-net provisions and funding for new infrastructure projects before Congress adjourns for the year.

Government subsidies of COBRA health coverage for the thousands of unemployed started to expire on Nov. 30, according to a House Democratic aide. Unemployment benefits for hundreds of thousands will also end on Dec. 31, said a Senate Democratic aide.

Durbin said new infrastructure spending would depend on reaching agreement with House negotiators and getting Republican cooperation in the Senate. A GOP filibuster could slow down the legislation enough to push it into next year.

Faced with a projected $1.38 trillion federal budget deficit projected for 2010, many Democrats say a jobs bill would have to be paid for. Its cost could not simply be added to the national debt, they say.


A growing number of lawmakers have called for unspent funds in the TARP, which was created to restore liquidity to the financial markets, to pay for a jobs bill. But the TARP authorization passed by Congress includes a provision requiring that unused funds go toward paying down the federal deficit.

Some media organizations have estimated $210 billion is left in the TARP.

During a news conference Monday, Obama hinted that he would be willing to use TARP funds for job-creation programs.

“I do think that although we stabilized the financial system, one of the problems that we’re still seeing all the time … is the fact that small businesses and some medium-sized businesses are still feeling the huge credit crunch,” Obama said.

“They cannot get the loans they need to make capital adjustments that would allow them to expand employment,” he said. “And so that’s a particular area where we might be able to make a difference.”

Obama gave no indication, however, whether he would support using TARP to pay for infrastructure spending that lawmakers want to pass this month.

Senate Democratic sources said they did not expect a small-business credit program or hiring tax incentives could pass before the end of the year.

Conrad, who championed the provision requiring excess TARP funds to be used to reduce the debt, said he is willing to negotiate a solution.

Conrad said he and Sen. Judd Gregg (R-N.H.) would unveil the details of his proposed task force on Wednesday.

In 2007, Conrad and Gregg proposed setting up a 16-member task force made up of eight Democrats and eight Republicans chosen by congressional leaders and the president. Under the plan, the commission was to have submitted budget-cutting recommendations that would receive an expedited vote in both chambers.

Durbin said lawmakers could strike a deal on a broad package that would extend safety-net measures such as unemployment benefits, set aside money for infrastructure projects, raise the debt ceiling and create a congressional commission to address the growing federal deficit.

“It’s a lot to do in the closing days,” Durbin acknowledged. “I don’t know how it will be sequenced.”

Sam Youngman contributed to this article.