Congress Finance

Senate’s Proposed Jobs Bill: Merely an Extension of Existing Legislation

» Highway Trust Fund, including Mass Transit Account, will get infusion for 2010, but see no serious changes or expansion.

One might assume that legislation termed the “Hiring Incentives to Restore Employment Act” would move beyond the status quo in promoting unusually strong approaches to creating jobs. That’s especially true because the United States suffers from a bout of extraordinary joblessness and a faltering economy: The government has a responsibility to act in producing more jobs.

Yet the Senate’s proposed jobs stimulus, at $80 billion, won’t do that at all, at least in terms of infrastructure. With its primary goal apparently to reduce taxes, the legislation — still in a draft form — will extend the existing federal surface transportation programs but provide no expanded funds for construction of new facilities.

Indeed, despite indications over the past several months from the House that a jobs bill would include new discretionary spending in favor of infrastructure — something of a second version of spring 2009’s stimulus — the Senate has approached the measure with considerably more modesty, hoping to attract bipartisan support from a seriously recalcitrant Republican minority.

The result, as currently envisioned, could be nothing more than a $20 billion infusion of money into the Highway Trust Fund, enough to keep transportation spending in line with 2009. For fiscal year 2010, the bill will include $8.36 billion for transit formula grants and a slight increase to $2 billion for transit capital grants, from $1.81 billion in FY 2009.

In other words, the bill will represent a hold on spending on transportation over 2009, since it doesn’t account for inflation. Some jobs stimulus.

The legislation is unlikely to see action until the week of February 22nd because of snow in Washington and the President’s Day recess.

The U.S. Congress was expected to move ahead on an extension of SAFETEA-LU, the 2005-approved transportation law, since the bill is set to expire after being repeatedly extended since its original retirement date in summer 2009. So this bill’s inclusion of the funds to continue spending on highways and transit represents no new investment.

SAFETEA-LU’s replacement with a much larger multi-year spending package has met considerable delays as a result of difficulties identifying a politically satisfactory funding mechanism. The fuel tax, which as first designed was supposed to pay for all of the federal government’s spending on the country’s transportation needs, hasn’t provided enough financing to satisfy the Department of Transportation’s budget since 2007. Proposed fixes, including an increase in the fuel tax, a vehicles-miled traveled tax, or a switch to pure general fund spending, have not generated enough support.

So the Congress has been forced to extend SAFETEA-LU periodically, an action that will be repeated in the jobs bill. But that extension represents no increase in federal funding obligations, a reflection of President Obama’s new efforts to promote bipartisanship through a discretionary spending freeze. If approved, the extension would expire on December 31, 2010, when Congress is finally supposed to pass its new transportation bill. That is, if it doesn’t simply extend this legislation for another year.

Secretary of Transportation Ray LaHood has been pushing for what has become an 18-month delay in drafting the new legislation since June 2009.

It seems unlikely that this piece of legislation, which does little more than extend a Bush-era law, will meet opposition from Republican lawmakers. That, it seems, is one of the primary advantages for a Senate that currently seems incapable of moving forward with virtually any legislation.

The jobs bill, however, is not yet finalized, and it may well include increased grants to public transportation and even potentially high-speed rail, especially if House leaders insist on such provisions in the conference committee, where the two sides of Congress will resolve their differences. Yet all indications thus far suggest that this “jobs” bill will produce very little new employment since in terms of transportation construction it will simply reaffirm the status quo.

In a moment when strong government action is necessary to shore up the economy, the U.S. Congress is skirting its responsibilities.

2 replies on “Senate’s Proposed Jobs Bill: Merely an Extension of Existing Legislation”

Good piece Yonah. What is the over-under on including any Federal money to actually operate transit systems throughout the country? Apparently there is some sympathy to building the next century’s system but doing that at the same time mass transit systems nationwide are undergoing mass layoffs and cuts of service seems to be a sort of “Emperor’s New Clothes” moment. Not only are the impending public transportation layoffs substantial, even enormous, but with all the cuts in service how are workers still employed supposed to get to work? Or, is this a back door way to increase the demand for all those clunkers the auto dealers are putting back on the market after last summers Federal support for the auto industry? Or, is it a point of the spear for “Return of Cash for Clunkers?”

So in originally proposed bill it was $14 B for Roads and $7 B for Transit which was a 2 to 1 Ratio. Now it is a 2.39 to 1 ratio. Well that is a bit of a let down but not surprising. What about the $2.5 B for high speed rail? Did that get removed. Anyways I’m over the senate. The only thing that will ever get out of that black hole is things giving away subsidies to farm states.

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