Business & Politics
On Tap: Son of Stimulus
Washington is responding to the growing urgency to reduce unemployment with another round of spending.
December 18, 2009
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Expect Democrats to start pushing a jobs bill right away, with some parts, such as an extension of unemployment benefits and COBRA subsidies, winning approval before the end of the year. Bigger battles will come in early 2010.
One key element: Infrastructure spending. Perhaps as much as $27 billion will be pushed out the door in a “stimulus 2” bill in time for spring construction on roads and bridges. The Obama administration and Democratic congressional leaders figure the spending will help generate or save more than 1 million jobs by the end of next year.
Besides the new funds that’ll be approved for highway work, contractors will see $13 billion coming from the first stimulus package approved by Congress in February 2009.
The jobs bill is also expected to funnel about $2 billion to municipalities for upgrades to drinking water and sewer systems. Plus $2 billion for an Energy Department loan program will assist municipalities and companies in deploying systems that make renewable power and upgrading electricity transmission lines.
President Obama wants around $4 billion to give to state, local and tribal governments for rebuilding and modernizing schools, but he may not get all of it. Democrats plan to pay with unused money from the Troubled Asset Relief Program (TARP), but Republican lawmakers prefer to use the TARP stash to reduce the deficit.
The jobs bill will also seek tax cuts for small business. The White House is pushing hard for an end to capital gains taxes for small firms to encourage investment as well as for incentives for smalls to step up hiring. Plus steps to provide more credit to smalls, though agreement on how may be elusive.
But all this help will be limited. Congress has no choice but to follow Obama and embrace the contradictory goals of spurring the economy while keeping deficits from growing too much more. Obama insists that the two are not irreconcilable because a growing economy is the single biggest engine for controlling deficits.
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Reader Comments (5)
Posted by: Beverly Sikes at 12/18/2009 12:03:31 PM
When the Pres. Bill Clinton was in office and pushing for health care/insurance reform they did make some inroads. But a good percentage of people were laid off due to this and the defense cuts and were unable to get direct jobs anymore. Most companies came up with the idea of temporary or contract employees. (Contract employees usually make a great deal more than direct employees as they will have to pay all expenses on their own, be prepared to move on a regular basis and know that if they make one mistake or someone doesn't like them, their job is gone). I know this for a fact as my job was directly affected by this and I had to adapt to the contract world. When the government caught on, companies had to offer insurance to temporary and contract employees but it was so expensive that most could not afford it. Temps and contractors could also not be hired direct unless they left the company for a certain amount of time. These conditions are still very much in existence.
NAFTA was another huge mistake. I saw mfg. plants, engineering companies and etc... that I had worked at or knew of, close up because the companies were opening plants in other countries. This affected all employees, but the ones closest to retirement the worst as they no longer income nor retirement accounts and were forced into the contract arena.
For a long time the quality of everything coming from other countries, including the engineering, were sub par.
Employers are waiting to see what happens with the health care bill before hiring direct again until they know exactly what the healthcare bill will mean to them in monetary terms. If it is a negative effect, there will be more temps (which on average make little money), and more contractors.
NAFTA needs to be re-addressed also so that America will actually be manufacturing things again. Infrastucture, or road work, is not the answer. You would think that since it is manual labor that anyone can and will do it. Again, most new, unskilled, employees will be hired as contractors. A person whose previous occupation was an accountant (for example) will not even attempt to try for one of these jobs for 3 reasons. 1st they make more money on unemployment, 2nd they haven't got the physical ability for the job and 3rd they know that it will look bad on their resume and negotiating a future salary will be tougher when they put down what they made per hour. The other downside? The new employees won't be able to afford benefits for their families and as soon as the funding is cut these people, contractors, will be out of work again. There is also the possibility of subpar roads and bridges.
Posted by: Georgie Boy at 12/18/2009 11:44:40 PM
Stimulating job creation by extending unemployment benefits is like filling up the freezer with some ice cream right before going on a diet -- what's the point, just sit on the couch and stay fat, dumb, happy, and unemployed.
Posted by: greatscot at 12/21/2009 12:32:43 AM
Those who are opposing healthcare are trying to prevent us from ending up like Canada. I'm from Canada, and I can tell you, you would not be happy with public healthcare. The government is poorly equipt to deal with providing services, and have a horrible track record on controling costs. Politicians live on the pork of big contracts. No incentive to cut costs and lower the profit margin for their buddies. We are so asking for trouble. Instead just mandate insurance companies to offer everyone in the US the same price for coverage - no one ineligible. The pool is large enough to handle the expensive people.
Posted by: Kathy at 12/22/2009 09:06:18 AM
Well said Beverly. NAFTA was the first biggest mistake that removed our valuable manufacturing jobs. Our government needs to think about incentives to give businessman and big corporations to bring back manufacturing. Open up the many empty and desolate buildings that were our factories and blood of our country. Start making what we need here in the US and employ our own people. Everything I pick up is imported from other countries. I try to buy American but it's impossible for everything. Many people, including myself, are holding off buying big ticket items. We continue to fix and repair because we just can't afford to buy new. But let's face it, this can't continue forever. At some point, we'll have to find a way to get the money or finance that much needed car, washer, refrigerator, stove, tools, medical supplies, as well as the necessary components and parts to build these items and much more. Let's get these items made in America again so that when Americans (hopefully can afford) or simply don'tt have a choice but to buy, we have an American choice. Where are the businessman and corporations in this process of really planning for the future of America? Doesn't any one see this as a opportunity to bring America and people back to work? I'm not a politician or corporate expert so I will not pretend that I understand the complications (implications) why it's so difficult to get our jobs back from the countries we gave them away to during previous Government Administrations. When the President sits down with the Corp. Execs to "brain storm" ideas for bringing back America, concentrate on finding a way to bring manufacturing back to the US. There will be jobs for many of the unemployed since corporations have many levels of employees. From the Presidents, Supervisors, Accountants, Workers and janitors etc. We're all out there looking for a job. Manufacturing in the US is the answer.
Posted by: Nomen at 06/07/2010 06:00:45 PM
What will Congress do??? After 30 years of unfair trade agreements, easing regulations on business, rampant illegal immigration, outsourcing and betraying American workers. It looks like they have done enough already. Hopefully, just extending unemployment benefits and a few more infrastructure projects will keep the American workers docile while the negative wage pressure continues. For most people their next job will pay less than their last one.