January 20th, 2010
04:54 PM ET
4 years ago

Jobs bill: New Senate math means rough road

Washington (CNNMoney.com) - The road for another stimulus bill just got tougher following Tuesday's election of Republican Scott Brown to the Senate in Democratic stronghold Massachusetts.

After health care, Congress' next big priority is to pass something that shows voters in an election year that they're on top of the nation's unemployment scourge.

But the Democrats' loss of a filibuster-proof super-majority in the Senate throws hurdles onto an already rocky path toward a new stimulus bill aimed at saving jobs.

Given how controversial the first stimulus package remains, passing a new jobs bill, or "second stimulus," was never going to be easy. Republicans have especially targeted the first stimulus package as a prime example of the kind of big government spending they aim to end.

"There is a reason the nation was focused on this race," said Senate Minority Leader Mitch McConnell, R-Ky. "The American people have made it abundantly clear that they are more interested in shrinking unemployment than expanding government. They are tired of bailouts."

Experts and policy analysts say the Republican win in Massachusetts will shore up Republican opposition to anything that looks like big spending.

"I think it'll be very hard," said Julian Zelizer, a professor of history and public affairs at Princeton University. "Democrats will be under more pressure to pass a jobs bill, because if they don't do something about the
economy, voter dissatisfaction will increase. But Republicans are going to be more emboldened not to vote for it."

The bills: The House passed a $154 billion jobs bill in December, but Senate Democrats are planning to debut their own jobs-creation bill in coming weeks.

The two bills were developed independently but share some components, like infrastructure spending to build roads and bridges, as well as state aid to plug budget holes and keep teachers and police officers employed.

Senate Democrats have been brainstorming in backrooms since last summer to come up with a package that incorporates ideas from all parts of their caucus, according to congressional aides. Party leaders Dick Durbin of Illinois and Byron Dorgan of North Dakota have been running the negotiations.

The final package will offer something for the left, like spending for green sector jobs, and something for the right, like tax breaks for small businesses that hire new workers.

On the tax breaks, Senate leadership is considering a proposal that Sen. Robert Casey, D-Pa., plans to introduce this week incorporating ideas Republicans have touted.

Casey wants to give a one-year payroll tax break to companies that create new jobs offering wages up to $50,300. Small companies would qualify for a 20% tax break and larger companies with more than 100 employees would qualify for a 15% break.

Another way to make a jobs bill more palatable to both fiscally conservative Democrats and Republicans is to craft a bill that pays for itself and doesn't add to the deficit. That's a big goal of the jobs proposal, Democratic aides say. But they wouldn't spell out how.

The bill may try to take advantage of money freed up in the budget by the fact that the Troubled Asset Relief Program is coming in under budget.

Wooing Republicans: Will such fiscal carrots be enough to woo any Republicans?

"Small business tax breaks are great," said Brian Darling, director of Senate relations at the conservative Heritage Foundation. "But when they're basically being used just to get some Republican support and the balance of the proposal is just federal spending, this sounds very similar to the first stimulus plan."

Doug Holtz-Eakin, a former Congressional Budget Office director, said that the Massachusetts win should send a signal to Democrats to start from scratch on the jobs bill and start working with Republicans. He said
Republicans would prefer a bill that focuses more on bigger and more effective tax cuts, like blanket breaks on payroll taxes and capital dividend taxes.

"The landscape has changed," said Holtz-Eakin, who advised 2008 presidential candidate Sen. John McCain. "They're going to have to go back and think about what policies are going to get the Republicans on board."

Indeed, a couple of Republican senators' offices said they can't imagine a Democratic proposal on jobs that could win them over.

"A second stimulus bill, packed with more spending, is the wrong way to approach this," said Jeff Sadosky, spokesman for Sen. Kay Bailey Hutchinson, R-Texas. "Obama's budget has already ballooned the debt. More spending is not the answer."

But Democrats may be able to peel off someone like Sen. Susan Collins, R-Maine, one of three Republicans who last February voted with Democrats to pass the original stimulus package. But she'd only be game if the jobs bill really didn't add to the deficit, a spokesman said.

"Senator Collins has said that she is open to considering the possibility of a jobs bill but her main concern is how it would be paid for?" said Collins spokesman Kevin Kelley. "She believes that the debt levels we are accumulating now, and that are projected, are simply not sustainable and pose a considerable threat to the health of our economy."


Filed under: economic stimulus • Economy • Senate
soundoff (55 Responses)
  1. Jenn, Philadelphia

    How do you pass a one trillion dollar stimulus package and now say you need another one? Maybe they should look at another way. And no, George W Bush did not sign the first stimulus bill, Obama did. Bush signed TARP I, Obama TARP II.

    January 20, 2010 07:57 pm at 7:57 pm |
  2. Ken in NC

    It doesn't make much of a difference about Democrats not having a Super Majority in the first place. When they had it they couldn't all agree among themselves. Democrats have been their own worst enemy. They knew all along that Republicans were going to say no to any and everything they proposed. Their problem is that they could not and still cannot function as a united party. I will give Republicans credit for one thing. When they say "WE WILL ALL" fight something, they "ALL" do it even if they do not all agree. Even if they come to a cliff they will all go off the cliff together rather than split the party. That is unity. Stupidy but unity.

    January 20, 2010 07:58 pm at 7:58 pm |
  3. Shelly

    How do Democrats screw it up? We have the right agenda for the country
    Tax cuts for the middle class, health care, education, math and science etc., But the GOP figures out a way to cause problems for us. They are intolerable!

    January 20, 2010 08:01 pm at 8:01 pm |
  4. A Kickin' Donkey

    Party of NO .... Go Ahead .... Fillibuster for the next 3 years .... I DARE YOU.

    In the age of YouTube, Twitter, Facebook, MySpace, etc. we don't need CNN, ABC, CBS, NBC, PBS to expose you. We can do it through viral media.

    You'll be underestimating how much of your own repugnant actions we will be able to expose to the voting public in 2010 and 2012.

    Democrats ... have some balls and put forth legislation that puts the common man 1st. Position legislation that will reveal to the "Joe the Plumber" crowd how support for the GOP is not in their self interests.

    Then let see Congress vote on that legislation .... Or NOT vote on it .... Either way ... the Republicans will fail or be exposed for what they really are.

    January 20, 2010 08:30 pm at 8:30 pm |
  5. southern cousin

    We passed a trillion dollar stimulus bill. Most of the money went for political payoffs to Obozo supporters, like the rebuilding of the UAW Executive golf course, SEIU/ACORN and the NEA. I think the healthcare reform bill was supposed to be the payoff for the trial lawyers. Let's get some of the money we already spent back from the left wing worthless organizations and fund a bill for real jobs,

    January 20, 2010 08:37 pm at 8:37 pm |
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