Senate Democrats today released their $85 billion jobs bill. Predictably, it's far less ambitious than its House counterpart, which focuses more on job-creating infrastructure projects. Why? Because Max Baucus, chair of the Finance Committee, which has jurisdiction over this bill, is embarking on another attempt at bipartisanship. Unlike his painful, prolonged attempt to get GOP support for health-care reform, this time Baucus already has a cosponsor, ranking member Chuck Grassley of Iowa. The result is a bill that's heavy on the GOP's sanctified cure-all: tax cuts. The problem, which will soon be the president's problem, is that these tax cuts don't create jobs.
The bill offers tax cuts for businesses that hire new workers (as long as they have been out of work for 60 days) and an income-tax credit for new employees who are retained for a year. Such measures are great incentives for businesses on the verge of hiring new workers and need a little push. But few employers are prepared to spend money on new workers just so they could get a tax break. That might be the case in heady economic times, which we are not in. The tax break does remove a smallish barrier to taking on new employees, but a bigger, scarier barrier still exists: lack of demand. According to The Associated Press, "Before businesses start hiring, they need increased demand for their products, more work for their employees and more revenue to pay those workers." The AP also reports that "in showing how difficult it is to create jobs through , CBO estimates that such a tax break would generate only eight to 18 full-time jobs per $1 million in tax breaks."
The bill also extends unemployment benefits and COBRA, both of which are important ways to alleviate the struggles of the unemployed. But neither creates jobs. What does all this amount to? A big problem for an administration that's raised expectations of its capacity to create jobs.
It appears that for the sake of bipartisanship, Democrats have abandoned measures that would actually make an impact, both economically and in terms of their political fortunes. Instead, not only have they focused their bill on GOP-type measures, as Ezra Klein notes, but they've also had to throw estate- and gift-tax reform into the bargain just to get GOPers on board. Really? Shouldn't they spend more energy making more of a fuss about why Republicans don't want to support job creation? (UPDATE: Majority Leader Harry Reid has since overruled Baucus, and killed his bill, replacing it with one that focuses solely on job measures.)
This strikes me as an opportune time to call Republicans on their procedural shenanigans. Democrats should unveil a jobs bill—one that CBO analysts can actually state would create a significant number of jobs through, say, infrastructure projects and state and local spending—and dare Republicans to filibuster it. Americans are consumed with worries about the economy and job security, and are demanding government action. Democrats could turn around and say: "Look, we're trying to create jobs. We have a concrete plan. We want to address the concerns you're begging us to. And the only reason we can't is that Republicans are blocking it. They don't want to create jobs. We do." Simple as that.
If Democrats sell it right, a jobs bill should be a popular piece of legislation. Instead they're moving quietly and begging—with sweeteners like the estate tax (which should enrage the left)—GOPers to help out. If they can't force a filibuster on an issue like this, is there any hope for breaking the back of procedural obstructionism?