On the other end of Pennsylvania Avenue, House Democrats have a plethora of ideas – and the 2010 midterm elections looming. They are trying to cobble together a new jobs package to specifically tackle the unemployment problem. Lawmakers insist it will be a targeted package, but there are numerous, possibly competing, proposals among the Democratic Caucus.
Here are some of the ideas House Democrats are considering:
• Extending unemployment insurance: Lawmakers just extended unemployment insurance last month for an additional 14 weeks, and for 20 weeks in states with unemployment higher than 8.5 percent. They are considering again extending that insurance.
• Infrastructure: Many Democrats wanted more funding for infrastructure in the first stimulus bill, and it's now a favorite proposal among Democrats. The first stimulus provided about $48 billion for highways, rail systems and public transportation, among other investments. Lawmakers could increase funding for those programs or reauthorize the over $500 billion highway bill that funds the nation's infrastructure projects, but expired this fall. The sheer size of the highway bill, and the Administration's preference for postponing it to 2011, make a smaller package look more likely.
• Aid to states: House Democrats say there will need to be more aid to states to prevent laying off teachers, police officers and other state employees.
• Extending COBRA subsidies: The stimulus package included a provision to subsidize laid-off workers' health insurance. If individuals made less than $125,000 per year and were laid off, they were eligible for a 65 percent subsidy to purchase COBRA insurance for nine months. That started expiring yesterday and Congress is talking about extending it either as part of the jobs bill or as a standalone measure if the jobs package is not ready before Christmas.
• Employer tax credit: Lawmakers are considering a jobs tax credit for employers who hire new workers. There is some skepticism among Democrats, however, about whether this provision would be effective or just help employers who would have hired new workers anyway.
Then there's the thorny issue of the $12.1 trillion deficit. Lawmakers also have no shortage of ideas of how to pass a new jobs package without deepening the nation's debt.
Here are the proposals to pay for the jobs package:
• Wall Street transaction tax: Rep. Peter DeFazio (D-OR) is leading the effort to make Wall Street bail out Main Street. He's proposed a "securities transaction tax" on stock transactions, futures and credit default swaps. Defazio estimates this would raise $150 billion dollars and could be spent to help create jobs and reduce the deficit.
• TARP: Another proposal in Congress would use some of the bailout money banks have paid back to pay for job creation.
• Unspent stimulus funds: As of late September, only one-quarter of the $787 billion in stimulus funds have been spent. Some lawmakers say even that unspent money is on the table.
How big the package will be and when the House will bring a jobs bill to the floor is still in question. Meanwhile, as Democrats move forward, they are fending off attacks from Republicans. GOP Conference Chairman Mike Pence (R-IN) said that the need for the White House jobs summit tomorrow "represents a tacit admission that the economic policies of this Administration and this congress have failed."
House Majority Leader Steny Hoyer defended the stimulus yesterday, pointing to a Congressional Budget Office report released this week. The analysis determined that the stimulus package has saved up 1.6 million jobs, that GDP is higher than it would have been and unemployment lower.
"All of those are indications that, in fact, the actions we have taken have worked," Hoyer said. But he also said House Democrats are not where they want to be on jobs and the economy yet.