THE BLOG

Business, Blue Dogs Blocking Passage of Jobs Bill, Taxing Wall Street

05/27/2010 06:09 pm ET | Updated May 25, 2011

Labor groups, including the AFL-CIO, are joining with House Democrats to back an ambitious bill that could save or create one million jobs while raising taxes on Wall Street investment fund managers -- and close loopholes that promote outsourcing. Bill Samuel, the AFL-CIO legislative director, told In These Times: "The Speaker is working as hard on this as she's done on any legislation." But corporate lobbyists seeking to preserve tax giveaways and concerns about costs from moderate Democrats have threatened passage of the legislation.

As Reuters reports today:

Congressional Democrats on Thursday scrambled to shore up support for a package of tax breaks and safety-net spending amid concerns about its $84 billion cost and doubts about a tax hike on fund managers.

The House of Representatives was scheduled to vote on what Democrats called a job-creation measure after slashing its costs by nearly a third, but prospects for passage appeared uncertain as centrist "Blue Dog" Democrats still believe it would add too much to the deficit.

Representative Stephanie Herseth Sandlin, a Blue Dog leader, said she did not think Democrats yet had the votes to pass the bill.

"Leadership is experiencing a lot of cross pressures within the caucus," Herseth Sandlin said.

Further cuts could anger liberals who want to spend more on construction and other programs to reduce the 9.9 percent unemployment rate

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But labor leaders and progressives argue that with 27 million workers unemployed or under-employed, Congress should be doing far more. As Politco reported, "Right now, jobs matter more than deficits," growled American Federation of State, County and Municipal Employees President Gerald McEntee, taking a poke at "corporate CEOs who ship our jobs overseas and stick American taxpayers with the bill."

The final scope of the bill was still being finalized before today's expected vote that still hasn't been held. In its current form, it will cost nearly $100 billion, down from $190 billion a few days ago, and it faces a right-wing onslaught for adding to the deficit and "raising taxes," even though on billionaires. But AFL-CIO President Richard Trumka highlighted the bill's key benefits:

This jobs bill will put Americans back to work by repairing crumbling infrastructure; stemming public sector layoffs in states; encouraging more bank loans to small business; extending unemployment benefits and health benefits for the unemployed through the end of this year; and providing over 300,000 summer jobs for unemployed youth.

He added, "If you're not for this bill, you're not for jobs. Period. And please, no more excuses about budget deficits unless and you're willing to make Wall Street pay its fair share to bring it down."

The legislation, which will face an uphill battle in the Senate, also extends COBRA and unemployment benefits through 2010. If it's not passed before the recess, millions of jobless workers will lose their benefits on June 2, when the current short-term extension expires.

The Economic Policy Institute highlighted other job-related provisions in a policy brief, and, if it passes, it will be the first time since the Wall Street-created collapse the financial wheeler-dealers have been taxed to help pay for jobs programs and incentives:

While H.R. 4213 [The Promoting American Jobs, Closing Tax Loopholes and Preventing Outsourcing Act of 2010] should be enacted just for the enormous good it will do in terms of economic growth and job creation, the bill also closes a host of tax loopholes that have allowed many of the wealthiest Americans to pay a lower income tax rate than the average steel worker, encouraged businesses to move their operations overseas to escape U.S. taxes, and allowed some professionals to forego paying their share of Medicare and Social Security taxes. These provisions will raise well over $40 billion, helping to pay for the bill's job creation provisions and to make the tax code much fairer.

As even the pro-business MarketWatch reports:

The bill aims to generate revenue by closing some loopholes. Almost $14.5 billion of foreign tax credit loopholes would be eliminated over 10 years.

Another money-raiser: Charging income-tax rates on investment fund managers' "carried interest," as opposed to the capital-gains rates they pay currently on those earnings. That provision would raise about $18.6 billion over 10 years.

It also offers direct benefits to working families and the poor:

  • $24 billion in additional funding to help states pay for Medicaid, without which there will be significant layoffs in state governments across the nation;
  • $5 billion to renew individual tax cuts;
  • $2.6 billion for a one-year extension of the Temporary Assistance for Needy Families (TANF) emergency jobs fund, which has created almost 200,000 jobs; and
  • 1 billion to create 300,000 jobs for young people this summer.

The AFL-CIO Now Blog aptly expressed the urgency labor and progressives feel about passage of the bill, given how limited jobs creation bills have been so far:

In a separate analysis, EPI estimates the legislation, which extends UI payments through the end of 2010, will provide an estimated 5 million unemployed workers with support, while ensuring access to affordable health care. But, "without this extension, over 8 million Americans will run out of unemployment insurance benefits by the end of this year. The extension will ensure that 5 million of these workers continue receiving support until the end of 2010."

Take a minute and call 877-442-6801 and urge your representative to vote for H.R. 4213 to create and save jobs and make Wall Street pay.

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This article is updated from a piece at the Working In These Times blog.