In response to my query on the content of the jobs bill and nature of the deal that earned Republican support for the bill, Senator Reid's office sent me a transcript of Reid's statements on the floor of the Senate this morning. The key graph (emphasis mine):
MR REID: I would also say that we are contemplating, if we can work out the procedural difficulties, not being in session tomorrow. We have some things we have to work out prior to that time because as most everyone knows, we have been working on a bill to end this work period. It's really a nice piece of legislation, started with a bipartisan jobs tax credit with Hatch and Schumer. We have a section 179 small business tax issue that small business is really looking for. We have a highway bill extension, and we also have build America bonds.
So, the four key components of the Senate jobs bill are:
Compared to the House jobs bill passed in December, the Senate bill has minimal new public spending. Here is what the House passed:
- A tax credit, proposed by Senators Schumer and Hatch, for small businesses that hire new workers (see more here)
- More Build America Bonds, which make it easier for state and local governments to borrow money (see more here)
- Section 179 Expensing: helps small businesses grow by allowing them to write off more of their expenditures
- About $20 billion for the Highway Trust Fund.
Shortly after increasing the debt ceiling, the House also narrowly passed a $150 billion jobs package, 217 to 212. The bill includes $48.3 billion in infrastructure projects, $26.7 billion for public sector jobs (teachers, fire fighters, police officers, etc), and $79 billion for social safety net programs such as unemployment insurance, COBRA, and Medicaid. Although it isn't in the legislation, Congress intends to pay for the jobs package using unspent TARP authorization funds, although it's unclear if the savings would cover the entire package.
Here are the key difference:
Effectively, the Senate bill is relatively bare of public spending compared to the House bill. The difference adds up to about $55 billion in public infrastructure and direct grants to save public sector jobs.
- While the House jobs bill included unemployment and COBRA extensions, the Senate will deal with unemployment insurance and COBRA in separate legislation during the final week of February.
- The House bill targeted $28 billion in highway funding, versus $20 billion in the Senate bill
- The House bill had $20 billion in other public infrastructure projects, but the Senate is focusing on tax credits for small businesses.
- The Senate bill makes it easier for states and local governments to borrow money through Build America Bonds, while the Hose bill gave $26.7 billion in direct grants to states.
So, yet another good, but already too small, bill has been further gutted by the Senate. The jobs bill coming out of the Senate is still better than nothing, but it will not make much of a dent in the broader employment picture.