- The Washington Times - Sunday, June 6, 2010

Prodded by last week’s disappointing job-creation numbers, Democrats and Republicans alike are calling for Congress to tackle yet another “jobs bill” — but after 2½ years of stimulus, and well more than $1 trillion committed, the appetite for stimulus spending has dropped.

That means that for the next two months, as lawmakers rush to complete the heavy legislative lifting before they turn full time to the campaign trail, the key question, as it has been for most of the past two years, again will be to spend - or not to spend.

Democratic leaders, who have already invested politically in stimulus spending over the past 15 months, said the fact that the economy is growing at all is testament to the $862 billion stimulus bill enacted in early 2009 and to repeated efforts to build on that.

Over the next few months, they hope to add to that list by approving more unemployment benefits, job-training aid, spending for state and local governments to hire or keep workers, and a small-business lending fund.

“Democrats in Congress will continue taking action on our No. 1 priority: creating good-paying jobs for the American people,” said House Speaker Nancy Pelosi of California.

But with the national debt now at $13 trillion and the annual deficit expected to be well above $1 trillion again this year, skittishness has risen in both parties.

That has forced a scale-back of some of Democrats’ plans, including dropping billions of dollars in extended health care subsidies to those who have lost jobs.

Senate Minority Leader Mitch McConnell, Kentucky Republican, said it’s time the government got out of the way of companies that could create jobs.

“The two things that are growing fastest in this Democrat economy are the size of the federal government and the crushing burden of the national debt,” he said. “Americans are doing everything possible to work harder, produce more, and live with less, while Washington is saddling them with even more government and insurmountable debt for their efforts.”

Though last year’s $862 billion Recovery Act gets the bulk of the attention, it’s just one of the efforts that’s been billed as stimulus. The first legislation pitched as stimulus was enacted under President George W. Bush, who in February 2008 signed into law more than $100 billion in temporary corporate tax cuts and tax rebates for individuals.

Since the beginning of 2008, the government has committed $1.1 trillion to direct spending and more than $800 billion in tax breaks, according to figures compiled on Stimulus.org, a website run by the Committee for a Responsible Federal Budget.

Part of the problem is that it’s impossible to gauge whether any of that has worked, said Maya MacGuineas, president of the organization.

“For everybody who claims it’s been a huge success to an absolute failure, one never knows what would have happened without it, and there’s absolutely no way of saying it created this many jobs, we would have gone into a depression without it,” Ms. MacGuineas said.

She said she thinks the spending helped and was necessary but that it added to the nation’s fiscal crunch.

“Given where we are today, it appears we’re done with needing to throw hundreds of billions at the problem,” she said.

She said some targeted measures such as extended unemployment benefits are sensible in tough economic times. Still, she said, it’s time Congress come up with ways to pay for extended benefits rather than tack the spending to the deficit.

The driving force behind the stimulus debate is the jobs picture.

The Labor Department on Friday announced that the economy added 431,000 jobs in May but said almost all of those were temporary U.S. census jobs. The private sector added 41,000 jobs, while other governments - chiefly at the state and local levels - cut about 20,000 jobs.

Complicating the picture is the fact that so many measures are being pitched as “jobs bills.” Everything from the health care overhaul to energy policy to adding new National Park Service property has been billed as an employment boon.

The term “jobs bill” has been used 234 times in the Congressional Record, the transcript of House and Senate proceedings, over the past 17 months. In the previous Congress, from 2007 through 2008, “jobs bill” was used 48 times.

Mr. Obama said last week’s job-creation numbers showed the successes of his administration’s efforts and that he backs added spending for unemployment benefits and to fund state and local government jobs, and to create a lending fund for small businesses.

“The question now is, how do we keep this momentum going? How do we keep adding jobs, raising incomes? How do we keep growing not just our economy, but growing our middle class?” he said at K. Neal, a truck plant in Hyattsville, Md. “In the short term, we have to keep creating the conditions for companies like K. Neal to succeed, to keep growing, to keep hiring.”

That drew a sharp rebuke from Peter Morici, a business professor at the University of Maryland and former chief economist at the U.S. International Trade Commission, who said stimulus spending is at its peak right now and to create only 41,000 private-sector jobs in May means the program has been a failure.

“Barack Obama learned his economics at a teach-in. He has no background in economics, he has no experience in government, and it’s starting to show. These numbers are terrible,” Mr. Morici said.

He said the stimulus could have succeeded if spending had been focused on construction and industry. At this point, he said, the money has been obligated to the wrong programs and the country is running too high a deficit to take a chance on more of that kind of spending.

“We’ve had enough stimulus because the kind of stimulus they want isn’t the kind that creates jobs,” Mr. Morici said.

Still, Chad Stone, chief economist for the Center on Budget and Policy Priorities, said Congress has a duty to do more. He said that means extending unemployment benefits and siphoning more federal money to states and localities to pay for government workers.

“Under these circumstances, policymakers should have no qualms about passing a robust jobs bill - indeed, they would be derelict not to,” Mr. Stone said. “Unemployed workers struggling to find a job need the help, and based on current forecasts of relatively weak economic growth for the rest of the year, the economic recovery could really use an additional boost.”

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