Jobs Bill is a Work in Process

President Obama announced his American Jobs Act with repeated calls to just pass the bill on a Thursday night. The following Monday, he provided a list of revenue sources for the bill to head off Republican complaints on its potential deficit implications.  He then took to the countryside to try to drum up support for the measure.  That was three weeks ago around Labor Day, remember?  So, where’s the bill? As expected, the bill raised a number of issues from both sides of the aisle.  The Republicans are still determined to say no to everything and the Democratic Caucus was less than enthusiastic on many of the bills provisions.  There is some more detail coming up on all of that today so I thought I’d share it.

Senate Democrats have taken issue with the Monday list of things suggested to pay for the bill. As economist, it does seem odd to try to pass a piece of legislation made to jump start the job creation process while offsetting the impact with recessionary fiscal measures.  The President is still more interested in meeting the Republicans more than half way than actually achieving effective legislation, imho.

Reid indicated he is going back to the drawing board to shore up wavering Democratic support for the $447 billion jobs bill.

Reid told his Democratic colleagues Tuesday that he would put together a new plan to pay for the package after rank-and-file colleagues balked at proposals to limit tax deductions for the wealthy and raise taxes on oil and gas companies.

“There are a wide range of things that we’re looking at, because the only objections I’ve heard from my caucus on the president’s jobs bill deal with the pay-fors,” Reid said. “So we’re resolving that issue as we speak.”

The real issue appears to be the tax increases for the extremely wealthy.  It appears to be highly unpopular with the usual group of DINOs.  Most of them are more concerned about their job safety than the jobs that any plan could potentially create. My Senator is still basically representing her donor base.

Sen. Ben Nelson (D), who faces a tough election in conservative Nebraska, said he would vote against a motion to begin floor debate on Obama’s bill.

“No, no, no,” Nelson said, when asked if he would roll the dice by allowing the bill to come to the Senate floor in hopes of amending it. “With the current offsets that are essentially tax increases? No.

“This is a time to be cutting. The cutting stops when the taxes increase,” he said.

Sen. Jon Tester (D-Mont.), another vulnerable incumbent, said Tuesday he would oppose the jobs bill as Obama drafted it.

“I can’t support it in its current form,” he told The Hill.

Sen. Mary Landrieu (D-La.), a critic of the oil and gas tax provisions, which would hurt a crucial industry in her home state, said she had yet to make up her mind.

“I’m going to listen to what the leadership says and make a decision about that later,” she said.

Sen. Kay Hagan (D-N.C.) said she would prefer raising new revenues through comprehensive tax reform instead of zeroing in immediately on specific tax increases.

“I think we’ve got to have comprehensive tax reform,” she said. “I’m always interested in looking at what we can do from a comprehensive standpoint.”

Max Baucus is testing the waters with a surtax on millionaires to fund the act. This measure is considered less controversial for Democrats.

Now, driven by party leadership and Sen. Max Baucus (D-MT), whose powerful Finance Committee has jurisdiction over the jobs bill, they’re considering a simpler, less parochial, and thus less divisivemeasure.

A Senate Dem aide cautioned that nothing’s final yet, and the party could ultimately settle on different measures. And there’s a history of broad Democratic support for raising taxes on millionaires.

During the health care debate in 2009, House Democrats backed a similar surtax on millionaires that would have raised over $500 billion over 10 years — more than enough to pay for Obama’s bill. Republicans and conservative Senate Democrats objected, and the measure didn’t make the cut in the final bill.

During the tax fight last December, Sen. Chuck Schumer (D-NY) proposed a creating a new millionaires tax bracket, rather than letting the Bush tax cuts expire for income above $250,000. It failed to overcome a filibuster but garnered broad Democratic support. And it also would have more than paid for Obama’s jobs bill.

That’s why something along these lines seems likely to bring most, if not all, Dems into the fold.

However, that still leaves the Republicans who continue to hold the economy hostage for their political purposes.  Republicans are said to be more united in their opposition to the American Jobs Act than the Democrats care about getting the act into law.  No surprises there! Anyway, the bill–as well as the current budget fight–seems like just another political prop in a campaign election season.

Meanwhile, there’s a lot of information being released today on the job market.  None of it is good.   Announced job cuts are said to be more than three times what they were this time last year.

U.S. employers announced the most job cuts in more than two years in September, led by planned reductions at Bank of America Corp. (BAC) and in the military.

Announced firings jumped 212 percent, the largest increase since January 2009, to 115,730 last month from 37,151 in September 2010, according to Chicago-based Challenger, Gray & Christmas Inc. Cuts in government employment, led by the Army’s five-year troop reduction plan, and at Bank of America accounted for almost 70 percent of the announcements.

While the bulk of firings are not “directly related” to economic weakness, they “could definitely be a sign of more cuts to come,” John A. Challenger, chief executive officer of Challenger, Gray & Christmas, said in a statement. “Bank of America is not the only bank still struggling in the wake of the housing collapse, and the military cutbacks are probably just the tip of the iceberg when it comes to federal spending cuts.”

More reductions will add to the pool of job seekers competing for work as policy makers, including President Barack Obama and Federal Reserve officials, strive to spur the labor market. Payrolls probably didn’t rise fast enough last month to lower the jobless rate, according to a Bloomberg News survey of economists before the Labor Department’s monthly jobs figures in two days.

However, Obama’s efforts appear to be paying off a little bit because the level of disgust with Congress is hitting a record high.  While Obama isn’t fairing much better, his bright spot was on who was more able to take on the nation’s jobs problem.

But the president’s new jobs package, which is supported by a narrow majority of the public, has bolstered his position on the issue. He now holds a 49 to 34 percent advantage over congressional Republicans when it comes to the public’s trust on creating jobs. That is a change from September, when they were evenly split at 40 percent each.

It’s hard to image that this entire situation could get much worse, but from the recent forecasts I’ve seen–including a new on from Goldman Sachs–there appears to be a consensus building that unemployment will go up again shortly.  This is certainly not good news for any one.  However, there seems like anything but a sense of urgency to do something about these forecasts within the beltway.  As usual, the only jobs they care about are their own.