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House narrowly approves Democratic jobs plan

President Barack Obama's Democratic allies in the House have muscled through a year-end measure aimed at creating jobs through a second round of stimulus spending.
/ Source: The Associated Press

President Barack Obama's Democratic allies in the House Wednesday muscled through a year-end plan to create jobs, mixing about $50 billion for public works projects with another almost $50 billion for cash-strapped state and local governments.

The unemployed would get continued benefits. But conspicuously absent from the plan were Obama's recently announced initiatives to give Social Security recipients $250 payments, a tax credit for small businesses that create jobs and a program awarding tax credits to people who make their homes more energy efficient.

Not a single Republican voted for the plan, which passed on a 217-212 vote after House Speaker Nancy Pelosi, D-Calif., worked the floor for an hour before it passed. The measure now goes to the Senate, which won't consider the measure until next year and which generally has a smaller appetite for such deficit-financed economic stimulus measures.

Given increasing anxiety among Democrats over massive budget deficits and the party's poor marks with voters for its free-spending ways, the measure could face a tough road. Almost 40 Democrats voted against the plan, mostly moderates and junior members elected from swing districts.

According to documents released by Democrats, the measure would cost $154 billion. But there's also another $20 billion from the federal treasury to keep the highway trust fund afloat.

The measure blends a familiar mix of money for highway, transit and water projects and aid to help communities retain teachers and firefighters. There's also $41 billion for a six-month extension of more generous unemployment benefits and $12 billion to renew health insurance subsidies.

Many of the ideas are renewals of programs started in February's $787 billion economic stimulus bill, which has earned mixed reviews from the public as unemployment has hit 10 percent.

The idea behind the "Jobs for Main Street Act" was to enact fast-acting steps that would quickly boost employment. The bill also reflects concerns among rank-and-file Democrats that the original stimulus measure didn't have enough money for infrastructure projects.

But infrastructure spending is notoriously slow to spend out as projects need to be planned and can require a lengthy contracting process. Most of the so-called shovel ready projects have already been funded.

According to the Congressional Budget Office, less than half of the $39 billion in the measure for transportation and housing projects would be spent over the next decade, with just $1.7 billion being spent through next September.

Democrats claimed $75 billion of the measure is "paid for" with unused money from the Wall St. bailout. Republicans countered that the bill is really financed with red ink since the bailout money would otherwise revert to the Treasury to lower the deficit.

Republicans branded the new bill "Son of Stimulus" and were withering in their assessments.

"More spending, more debt. Same lousy policies that haven't produced jobs all year," said House Minority Leader John Boehner, R-Ohio.

Democrats also say that economists largely credit the earlier stimulus measure for the fledgling economic recovery and the improving unemployment picture.

"The situation is worse than we thought and getting better more slowly than we hoped but it's clearly getting better," said Rep. Barney Frank, D-Mass.

Democrats said that the measure would prevent a double-dip recession by giving state and local governments $23 billion to retain teachers and lesser amounts to keep firefighters and police officers. And it would help prevent tax increases by state governments by giving them $23.5 billion for the Medicaid program for the poor and disabled.

Republicans also distributed a chart showing that roughly half the money goes into accounts brimming with cash from the earlier stimulus bill.

"The agencies are awash with money coming through the pipeline," said Rep. Jerry Lewis, R-Calif.

But Appropriations Committee Chairman David Obey, D-Wis., countered that most of the earlier stimulus money has been committed if not actually spent.

The measure also includes money for Amtrak construction, school renovation and job training. There's also $1.1 billion for part-time college jobs, summer employment for low-income teenagers and money for workers in national parks and forests.

The bill also allows very poor people with as little as no income to claim a $1,000-per-child tax credit in what Republicans charged was simply a welfare payment to 16 million poor families.

The bill also would extend federal surface transportation programs through the end of next September.

Democratic leaders had to scramble to find the votes for the measure, which came up right after the House approved a $290 billion increase in the government's ability to borrow. That 218-214 vote reflected unhappiness by moderate Democrats about adding to the nation's red ink.