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House Leaders Push for Jobs Bill

11/18/09 - Wall Street Journal

By John D. McKinnon and Greg Hitt

The House of Representatives is pushing a bill aimed at boosting employment, a potentially risky move that underscores Democrats' fears about the economy and jobs -- including their own as they head into an election year.

Elements of such a bill could run the gamut from infrastructure spending to small-business lending to extra aid for states and the unemployed, lawmakers said. Democratic leaders haven't determined any specifics -- including the politically dicey question of how to pay for it.

Among ideas floated Tuesday by Democratic leaders were using bailout money from the Troubled Asset Relief Program and a tax on Wall Street firms' financial transactions, such as derivatives trades.

Rep. Chris Van Hollen of Maryland, who runs the House Democrats' campaign effort, said lawmakers were aiming for a six-year infrastructure bill that also could include energy-related investment.

Mr. Van Hollen, a member of the Ways and Means Committee, said lawmakers also might consider a payroll-tax holiday -- a short-term break on Social Security and Medicare taxes to boost private-sector hiring. He said that might be an alternative to an employer tax credit for new hires, an idea that critics say is fraught with enforcement problems.

The White House didn't comment on the developments. President Barack Obama announced a jobs summit for early December and the administration is likely to weigh in with its own recommendations.

House Majority Leader Steny Hoyer (D., Md.) said he hoped to bring the bill to the House floor by mid-December, giving rank-and-file lawmakers a chance to vote just before the start of the 2010 election season, when control of Congress will be up for grabs.

"Clearly, 10.2% unemployment is unacceptable and is causing great pain to literally millions of people around the country," Mr. Hoyer said.

House lawmakers hope the Senate also will act before the end of the year. Senate leaders said late Tuesday, they planned to tackle the issue only after completing the health-care overhaul. Sparring over the jobs legislation could last for many weeks beyond that.

AFL-CIO president Richard Trumka put pressure on Congress to act Tuesday when he rolled out a proposal putting heavy emphasis on government spending on infrastructure, including schools, as well as a new round of aid to states and local governments to forestall layoffs.

Rep. John Larson (D., Conn.), the House Democratic caucus chairman, said he believed House Democrats would have to offset the bill's cost, at least in part, to answer concerns about the soaring federal budget deficit. The government is expected to run a $1.4 trillion deficit in fiscal 2010, which began on Oct. 1. Democrats are likely to delay the effective date of new taxes until the recession is over.

Another possible revenue source is taxes on Internet gaming.

Mr. Larson, who as the House Democratic caucus chairman pays close attention to rank-and-file members' attitudes, said there was growing momentum for a tax on some Wall Street trading.

Leading Democrats in both chambers, including Rep. Barney Frank of Massachusetts, have expressed reservations about a tax on financial transactions, out of concern it could drive trading offshore.

Senate Budget Committee Chairman Kent Conrad (D., N.D.) said he would support legislation that would further extend the jobless benefits program and boost infrastructure spending, including roads and bridges. The senator said such spending would not only create jobs but boost the efficiency of the U.S. economy. "We need to do much more, " he said.

Brad Dayspring, a spokesman for House Republican Whip Eric Cantor (R., Va.), said any bill that added to the deficit wouldn't work. "They tried that approach once and failed," Mr. Dayspring said.

Among the ideas for unused TARP funds are direct lending to small businesses, and funding of an infrastructure bank that would provide seed money for projects.

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