Wednesday, December 16, 2009

Obama’s New Jobs Initiative

The Obama administration and House Democrats are pushing forward a second jobs initiative this week, though prospects for Senate consideration of the measure before year end are grim. The proposal will redirect $75 billion from unspent TARP appropriations to job creation programs and extensions of emergency assistance for those now out of work. The measure is expected to ultimately include $35 billion for highway and transit construction, $2 billion for water construction projects and affordable housing construction, and about $11 billion for school construction and renovation. Additional appropriations will include $23 billion for teaching jobs, and $6 billion for other job programs including local law enforcement, summer jobs for youth, and college work/study programs and AmeriCorps job training.

Conspicuously absent from the House measure are two programs President Obama has promoted as creating “green” jobs: so called “cash for caulkers” incentives for home and business weatherization efforts, and tax incentives for small business new hiring.

Emergency relief measures in the House bill will include $79 billion to provide a six month extension of unemployment benefits, COBRA subsidies, and other “safety net” programs for the jobless. In the expectation that Senate action on the House bill will not happen until next year, the House is at the same time including a two month unemployment and COBRA benefits extension in the Defense appropriations bill, attempting to avoid the break in benefits jobless folks experienced last time Congress stalled action on unemployment extension legislation.

The White House is also proposing a $5 billion addition to tax credits for renewable energy products, in an effort to spur hiring in the manufacturing of such things as wind turbines, solar panels and electric cars. Knowing that the $2.3 billion in the stimulus package for such projects was oversubscribed suggests that users of such new incentives are ready to move at a moment’s notice.

Speaking at a Home Depot store in Alexandria, Virginia yesterday, Obama highlighted the home weatherization programs as part of the administration’s efforts to assist the construction industry, where unemployment has reached 21%. His remarks, however, glossed over the fact that the $5.5 billion appropriated in the stimulus package for energy retrofits of federal government buildings has been painfully slow to percolate out into the economy. GSA so far has allocated only $1.5 billion of the $2 billion appropriated for use in 2009. The agency is racing to allocate the remaining half billion dollars in the final two weeks of this year. Furthermore, of the $2 billion to be allocated, only $89 million, or less than 4.5%, has actually been paid out to contractors.

Reports from contractors in this sector indicate that government projects are replacing only 15% to 30% of the private sector business lost due to the crash of the economy.
blog comments powered by Disqus