By Larry Jones
March 8, 2010

In response to persistently high unemployment in communities across the nation, Democratic leaders in the Senate unveiled plans recently to introduce five separate jobs bills to save existing jobs and create new ones to put unemployed workers back to work.

Senators Mark Begich (AK) and Debbie Stabenow (MI) discussed these proposals with mayors attending the Conference of Mayors Winter Leadership Meeting in Washington (DC) February 24-25.

Conference of Mayors President Burnsville (MN) Mayor Elizabeth B. Kautz has made creating jobs to put Americans back to work her top priority. Kautz and Conference of Mayors Vice President Los Angeles Mayor Antonio Villaraigosa and mayors from around the country visited Capitol Hill to urge immediate passage of jobs legislation.

At the meeting with Begich and Stabenow, mayors were told that the Senate leadership plans to introduce five separate bills to improve job growth as soon as possible. The proposals will focus on providing tax incentives to encourage private employers to hire new workers as well as expanding safety net programs, such as unemployment insurance benefits; helping small businesses more easily access the credit they need to expand and hire more workers; creating jobs through promoting energy efficiency; investing in improving the nation’s critical infrastructure, considered one of the best ways to create jobs to put American back to work; and providing assistance to state and local governments to help them retain critical workers.

At the beginning of the meeting, Kautz explained to the two Senators that many cities across the nation have experienced severe budget shortfalls for the last two years and have been forced to make drastic cuts in critical public services in order to keep their budgets in balance. “Unless we receive assistance soon, many of our cities will be forced to make even deeper cuts in police officers, firefighters, teachers, bus drivers and health care workers,” she said.

Kautz also explained that under the American Recovery and Reinvestment Act (ARRA), states received federal assistance under the FMAP program to help them fill their budget gaps. But no direct federal aid was provided to local governments to assist them with their budget shortfalls. Having served as mayor of Anchorage for over five years, Begich assured mayors that he understood their concerns, as did Stabenow who served as Ingham County Commissioner.

The following provides a brief summary of the five proposals that the Senate plans to consider in the coming weeks.

Tax Incentives to Spur Immediate Job Growth – to get private employers to hire more workers, this proposal would exempt them from the 6.2 percent Social Security payroll tax through December 2010 if they hire people who have been unemployed for at least 60 days. Employers would also be entitled to a $1,000 tax credit for each new person hired and retained for 52 consecutive weeks. It also calls for extending unemployment insurance benefits, COBRA health care benefits for unemployed workers, a small business investment depreciation tax deduction for major equipment purchases, a one- year extension of the Surface Transportation Act, and a provision that would permit local governments to convert tax credit bonds to Build America Bonds in order to reduce their borrowing cost on infrastructure projects.

Helping Small Businesses Grow and Hire More Workers – this proposal calls for: streamlining current Small Business Administration (SBA) programs to help small businesses more easily access the credit they need to expand and hire more workers; creating a new partnership between the SBA, Department of Commerce and the U.S. Trade Representative to help small businesses export their products to foreign markets; and creating a Small Business Lending Pool to help community banks more quickly lend to small businesses. Improving small business assess to credit is a key priority mentioned in the Conference of Mayors 2010 Metro Agenda for America that mayors are pushing to help create more jobs.

Creating Jobs Through Energy Efficiency – to promote energy efficiency and green jobs, this proposal would provide tax rebates to consumers on qualifying renovations, while providing contractors thousands of projects on which to work. It will also provide grants for energy efficiency renovations for affordable housing and manufacturing plants. Further, it will help the Department of Energy distribute energy efficiency program funds more quickly. This is a big concern for many mayors who still have not receive their Energy Efficiency and Conservation Block Grant funds which were approved over a year ago. Further, mayors are urging that funds be included in the jobs bill to continue funding for the program beyond this year.

Rebuilding America – under this proposal, jobs will be created by making investments to improve the nation’s crumbling infrastructure. The proposal calls for Investments in all of the major transportation modes, including airports, highways, intercity rail, and mass transit. It also calls for more funding for TIGER grants, which are multi-modal grants. Further, it would provide grants to upgrade school buildings as well as local drinking water and waste water systems. Grants would also be provided through the Economic Development Administration to support regional development projects such as intermodal facilities, ports and regional business development projects. TIGER Grants and school construction are high priorities that mayors would like to see adopted in the jobs bill.

Investing in Critical Public Services – this proposal would help state and local governments maintain critical jobs such as firefighters, police officers and teachers. It would also provide additional funds for summer youth jobs for young people in targeted communities and increase funding for the dislocated worker program, which provides grants to retrain unemployed workers in new skills and trades. Increasing funding for the COPS program and summer youth jobs are also Conference priorities mentioned in the 2010 Metro Agenda that mayors feel should be included in the jobs legislation.

The Senate approved the first jobs bill, the $15 billion tax incentives proposal, H. R. 2847, mentioned above by a vote of 70-28 on February 24, and the House approved the measure by a vote of 217-201, mostly along party lines on March 4. According to Mark Zandi of Moody’s Economy.com, the tax incentive proposal is expected to create 250,000 new jobs. The President is expected to sign the bill into law soon.

The Senate began working on a second jobs bill, H.R. 4213, the American Workers, State, and Business Relief Act of 2010 on March 1. The $149.3 billion measure would further extend unemployment insurance benefits and health care benefits for unemployed workers through the end of 2010; tax cuts and assistance to help small businesses create jobs; assistance to states under the FMAP program to help them fund their Medicaid programs which provide health care for needy individuals; and several tax breaks which expired last year, including deductions for state and local sales and property taxes, and the research and development tax credits. It is unclear when the Senate will complete debate and vote on a second jobs package.

In a March 3 letter to Begich, Kautz urged that Targeted Fiscal Relief be included in the next jobs bill in addition to increased support for summer youth jobs and other priorities in the Conference of Mayors 2010 Metro Agenda for America.