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Bipartisan Blight 4: The Shrinking Jobs Bill

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"Yesterday, we took a step, a strong first step toward putting Americans back to work, but ... it's a first step. This is the beginning, not the end," Senate Majority Leaded Harry Reid said, hailing the pending passage of a $15 billion jobs bill, as five Republican Senators, led by newly elected Massachusetts Senator Scott Brown, joined to break the reflexive Republican filibuster.

The Christian Science Monitor suggested Reid had discovered "the secret for moving legislation" -- proceed in piecemeal fashion, focusing on measures that have broad popularity. Next up, a thirty day extension of unemployment insurance, and then a second jobs bill focused on "a tourism promotion bill, a series of measures to help small businesses, and a package of popular tax-credit extensions, including an extension of unemployment benefits."

Is this the measure of bipartisan success -- passing legislation that scarcely measures up to a gesture? Next, they'll celebrate bipartisan cooperation in creating jobs by joining together to expand the presidential libraries of Bill Clinton and George Bush (well, maybe not).

Democrats are currently bedeviled. With control of the White House and both houses of Congress, they are expected to produce. And most Americans, the polls suggest, want the parties to work together to solve the country's staggering problems. So every politician -- left, right and center -- pays at least rhetorical tribute to bipartisan cooperation. This week, Washington is awash in bipartisan treacle -- from Evan Bayh's parting complaints, to Thursday's White House Showtime on health care.

But there is a small problem. We're in the midst of a pitched battle about direction.
Republicans -- reduced to an overwhelmingly conservative, largely Southern caucus -- are more ideologically unified than ever, and wedded to tax cuts, domestic spending cuts, and deregulation. Now despite the recession, they proclaim a politically convenient reborn belief in balanced budgets. Their conservative base is aroused. They see the Obama program as a nefarious attempt to transform America into a "socialist" -- read social democratic -- country. Their natural congressional strategy has been one of obstruction: just say no to whatever Obama says, and use the filibuster and the hold and other arcane Senate rules that empower the minority to block progress.

This strategy is enforced by conservative activists and corporate lobbies. Thus, every Republican pre-presidential candidate appearing at the recent Conservative Political Action Conference celebrated the "Party of No" strategy against Obama, while arguing that bipartisan cooperation could take place only on their terms. Want a bipartisan dialogue on health care? Scrap the plans that passed the House and Senate and start over. Want a bipartisan dialogue on financial reform? Torpedo any hint of an independent agency to protect consumers. Want progress on energy? Drill, baby, drill.

This strategy has been surprisingly effective. After Scott Brown's victory in Massachusetts, Republicans are salivating about big gains in the fall. They aren't about to change strategy.

So what are Democrats to do? The latest gambit is to try bite sized legislation, defined largely on conservative terms. The $15 billion "jobs" bill is a perfect example. It won't add much to the deficit and is composed almost entirely of corporate tax cuts.

It only suffers from one flaw. It can pass, but it won't matter much. The US now has some 25 million people unemployed or underemployed. Long-term unemployment is at record levels. In urban areas, the level of unemployment among the young reaches towards one in two. States and localities are facing brutal fiscal crises that will require further layoffs of teachers, police, fire fighters and other state workers and contractors. Americans, reeling from the loss of $13 trillion in assets, are reducing debts and tightening their belts. Consumers and companies are paying down debt, not spending or investing. Banks are raking in record profits, but are cutting lending to the real economy. The first Recovery Plan staunched the collapse of the economy, but simply was not sufficient. In response, the House passed a $150 billion jobs bill in December. Obama sought a $250 billion package, largely for corporate tax cuts, infrastructure, and aid to the unemployed. Even that was probably inadequate to the task.

In comparison, the $15 billion "jobs" bill doesn't merit the name. It consists primarily of tax breaks for businesses -- waiving the employers' payroll tax for a year for the hire of someone unemployed over 60 days. If the employee is kept on the payroll for a year, the company can earn a $1000 tax credit.

The CBO generously estimates this might create 250,000 jobs -- not even a dent in the jobs shortage. But the real number is likely to be far less. Even in a recession, some employers are hiring while more are laying off folks. The tax credit will go almost entirely to reward employers who are hiring people that they would hire anyway. And the rest is likely to reward employers who game the system (close down a union plant in Michigan and open a non-union one in Mississippi and collect the tax credit along the way).

If this lands on the president's desk, it will be celebrated as an example of bipartisan cooperation. Senate Majority Leader Harry Reid is committed to holding a series of votes on various bite-sized elements of a jobs program to see if he can gain the handful of Republican votes needed to get by the inevitable Republican filibuster.

But Reid's strategy is likely to end up with both bad policy and bad politics. Bite sized bills on conservative terms won't begin to address the challenges we face. They aren't likely to be viewed as a success by Americans -- who are far less interested in process than in results. Reid's strategy may well succeed in letting Republicans look cooperative and Democrats look ineffective.

At the end of the day, Americans must be presented with the real choices we face. The crisis is too severe for the argument to be ducked. Democrats would be well advised to force votes on a real jobs program, a serious measure to curb the banks, comprehensive health care. Republicans will obstruct. Democrats should make them filibuster, expose the corporate interests that are behind them, and lay out their alternatives. Then move as much as possible by majority rule, and take the argument to the American people. Mobilize progressives rather than dismaying them. Americans deserve a choice. And Democrats are likely to fare better by making it a clear one.