The White House jobs summit is happening right now. You can watch it at WhiteHouse.gov, though I would suggest you not switch over until Tom Friedman is done speaking.
The summit itself, featuring dozens of political, media, labor and business leaders, is not quite as important as the momentum for public investment in jobs. And that does appear to be happening. Nancy Pelosi said today at her press conference that voters will judge Democrats next year almost entirely on their handling of the jobs issue:
I believe that the Democratic base, as well as the Republican base and the independent base, is interested in jobs, jobs, jobs, jobs. I think the focus is so much more now on job creation, and that really is what we are all focused on as well. The Afghanistan situation is an ongoing discussion in our country, in our Congress, and in our party.
I do think that meeting, again, and where I began, meeting the needs of America’s families and seeing the progress they make is what is important to us and to the President. We will measure our success in that way; and hopefully the American people will, too, in the next election.
She wants a jobs bill completed in the House by the end of the year.
That said, what is being discussed? Well, quite a bit!
• Aid to the states. Speaker Pelosi brought this up at her presser. The CBPP estimates that 900,000 could be at risk in the next fiscal year because of cutbacks to state budgets. Those cuts could end up being permanent rather than temporary, especially once the stimulus funds for the states run out. Those funds helped but were insufficient. This is a horrifying quote:
“I think we’re kind of in a permanent retrenchment,” says Raymond C. Scheppach, long-time director of the National Governors Association. “There are a number of areas where we’ve got to sit back and almost look at new models for delivering services.”
Harold Meyerson lays the blame at a flaw in federalism, where state budgets cannot deficit spend and then have to cut their budgets at precisely the time when they are getting more demand for services and ought to be spending more during recessions in the absence of other investment. In order to compensate for these counter-cyclical issues, the federal government can step in, and perhaps build a permanent apparatus. Meyerson expands on this thesis in today’s Washington Post.
• Infrastructure spending. One of the job summit breakout sessions is called “Creating Jobs Through the Rebuilding of America’s Infrastructure.” Many infrastructure ideas are contained in Democratic proposals that have been discussed on Capitol Hill.
House Transportation and Infrastructure Committee Chairman Jim Oberstar (D-Minn.) and Rep. Peter DeFazio (D-Ore.) pushed Wednesday for $69 billion for highway and transit projects that could be started almost immediately with funding. Oberstar had criticized the earlier stimulus bill for not including enough infrastructure spending, and House Speaker Nancy Pelosi (D-Calif.), House Appropriations Committee Chairman David Obey (D-Wis.) and Sen. Kent Conrad (D-N.D.) have voiced support for more infrastructure spending to create jobs.
• Increasing small business loans. Sen. Mark Warner (D-VA) has been spearheading this effort. As today’s hearing with Ben Bernanke, the Federal Reserve chair claimed that money is getting out from banks to small businesses, but not one Senator believed it, and they had plenty of information from back in their states. The number discussed for small business lending is around $20 billion, to come from TARP money.
• Social safety net expansion. This would include extensions of unemployment insurance, and the COBRA subsidy to allow people to keep their health insurance. This could cost as much as $100 billion. The idea is that those people would get that money and spend it. This has been shown to be a good multiplier in the initial stimulus bill, meaning that the money gets circled through the economy quickly.
• Job creation tax credit. The Hill reports:
Tax credits for businesses that hire new full-time workers would cost about $27 billion under a proposal by Sen. Russ Feingold (D-Wis.) and the Economic Policy Institute, a left-leaning policy group. A new hiring tax credit has received extensive discussion and is under consideration by President Barack Obama, according to his economic team.
This one kind of worries me, especially if companies do the hiring they would have done anyway and just collect money in the process.
• Work-sharing. John Conyers introduced a bill yesterday to increase work-sharing programs, already available in 17 states. Basically, the proposal, pushed by CEPR’s Dean Baker, would encourage work-sharing as opposed to layoffs. Here’s an example of how one company did it:
Workers in some departments at Taco were cut back to either a three-day or four-day week. Unemployment insurance covered more than half their lost wages and they kept benefits including health insurance. This year, all Taco’s 292 production workers in Rhode Island and Massachusetts have been on work-sharing at some point, cut back to four-day weeks.
“If we had not been able to use the work-sharing program, I believe we would have seen some potential layoffs,” said Kyle Adamonis, Taco’s senior vice president of human resources.
Rhode Island is battling 12.9 percent unemployment, spurring interest in a program in place since the early 1990s. Employers have used work-share to avert the equivalent of 5,800 layoffs through October, quadrupling the program’s rolls from two years ago.
The federal government could provide financial incentives to the individual to work less hours and prevent layoffs. Conyers believes that this kind of program would cost just $22,500 per job, which is a tremendous return on investment. Here’s Dean Baker’s report, “Pay People To Work Shorter Hours.”
• Direct investment of jobs. Some have called this a “job corps.” This would echo programs from the 1930s and 1970s where the government did direct hiring in local communities, whether for child care, cleaning up vacant lots, or a host of other jobs. It’s basically a modern-day WPA.
“This is a pretty effective way to get money into the economy and into the pockets of people so they can do something productive,” says Carl Van Horn, director of the Heldrich Center for Workforce Development at Rutgers University.
• Weatherization or “Cash for Caulkers”: The President just now at one of the small jobs summit groups said that energy efficiency would probably be part of any effort, because it could be done with little start-up funds. This would involve the government encouraging clean energy adaptations to homes or trade-ins of low-grade appliances for more energy-efficient models.
As for the inevitable calls for how to pay for this – one idea floated by the Speaker is to use unspent TARP money, a pot about to get bigger as Bank of America pays back their funds. The financial transaction tax is another possibility. Of course, Republicans like Minority Leader John Boehner, who believe it or not is holding his own jobs summit today, doesn’t want to use TARP money for anything but deficit reduction. He obviously thinks unemployment is just fine where it is.