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Obama election-year jobs agenda stalls in Congress

Posted April 11, 2010

— The election-year jobs agenda promised by President Barack Obama and Democrats has stalled seven months before voters determine control of Congress.

There's no money for the jobs bill program, because both Republican senators and the Democratic chairman of the Senate Budget Committee objected to funding it with money from the fund that bailed out banks, automakers and insurers.

Such a move, they say, would add tens of billions of dollars to the $12.8 trillion national debt.

An $80 billion-plus Senate plan promised an infusion of cash to build roads and schools, help local school systems avoid layoffs and give rebates to homeowners who make energy-saving investments. Two months after the plan was introduced, most of those main elements remain on the Senate’s shelf.

Obama’s proposed $250 bonus payment to Social Security recipients is dead for the year, having lost a Senate vote last month.

Instead, small-scale initiatives are going ahead, such as help for small business or extensions of parts of last year’s economic stimulus measure. None is expected to make an appreciable dent in the 9.7 percent unemployment rate.

Legislation to extend unemployment benefits has run into trouble since Republicans and the tea party movement are putting election-year heat on trillion-dollar-plus budget deficits.

Bills providing for one-month extensions of COBRA health insurance subsidies, unemployment benefits and flood insurance has twice run into trouble from Republican senators insisting that the measure be fully funded and not add to the deficit.

Before Congress went on spring recess in late March, Sen. Tom Coburn of Oklahoma became the second Republican senator to block the bill by invoking Congressional rules that allow any senator to delay votes on a bill for five days.

A compromise, crafted by Senate Democrat and Republican leaders, to fund a one- or two-week extension was nixed by Democratic House Speaker Nancy Pelosi.

“You never know in politics when that magic moment comes when things really begin to change, but I believe that it has occurred now,” said Arizona Sen. Jon Kyl, the second-ranking Republican. “I think you’ll see a much greater commitment now to fiscal responsibility.”

The idea of a jobs agenda arose late last year when the unemployment rate hit 10 percent, and Democrats voiced concern that the majority party wasn’t doing enough to spur job creation. In December, House Democrats passed a $174 billion measure focused on public works spending, jobless aid and help to struggling state and local governments.

In the Senate, Majority Leader Harry Reid handed the issue over to Democratic Sens. Dick Durbin and Byron Dorgan. They devised the $83 billion plan, focused on small business, infrastructure projects, energy efficiency and support for public-sector jobs.

However, the Senate Budget Committee chairman, Sen. Kent Conrad, a Democrat, has opposed using bailout funds to pay for it.

Since then, the measure has languished, and concerns about the rising national debt have sapped momentum. The election of Republican Sen. Scott Brown in a Massachusetts special election stripped Democrats of the 60 votes needed to block a filibuster.

Democrats and Obama have had one legislative victory on the jobs front. With bipartisan support, they passed legislation giving companies that hire the unemployed a payroll tax holiday through the end of the year.

When the Senate returns Monday, Democrats are optimistic that the jobless aid will pass – first as a $10 billion stopgap and then as part of a broader bill extending the benefits through the end of the year. The second, larger bill includes aid to cash-starved state governments, higher Medicare payments for doctors and an extension of several tax breaks.

That larger measure, to be financed mostly by adding almost $100 billion to the debt, is the biggest piece of the jobs agenda with a good chance to pass into law. It doesn’t contain new elements, but mostly extends portions of Obama’s $862 billion economic stimulus law.

However, Democrats will need to find about $30 billion to extend tax cuts contained in the stimulus. A fund to pay for them was sapped by the recently passed health care overhaul.

The dilemma hasn’t gotten much attention on Capitol Hill but is threatening to delay the extension of the tax breaks. That includes a popular research and development tax credit and a tax deduction for sales and property taxes for people from states without an income tax. The lapse of a tax credit for makers of biodiesel already has hurt producers of the alternative fuel.

Also ahead for lawmakers in April and May is overhauling how the government regulates banks in response to the 2008 financial meltown and passing spending bills to cover the wars in Afghanistan and Iraq.

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