Lack of money stalls Obama’s jobs agenda; GOP objects, as does leading Senate Democrat

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Obama election-year jobs agenda stalls in Congress

WASHINGTON — The election-year jobs agenda promised by President Barack Obama and Democrats has stalled seven months before voters determine control of Congress.

Democrats have no money to pay for the program. That’s because both Republicans and the Democratic chairman of the Senate Budget Committee objected to taking money left over from the fund that bailed out banks, automakers and insurers and using it for the jobs bill.

Such a move, they insisted, would add tens of billions of dollars to the $12.8 trillion national debt.

An $80 billion-plus Senate plan promised an infusion of cash to build roads and schools, help local governments keep teachers on the payroll, and provide rebates for homeowners who make energy-saving investments. Two months after the plan was introduced, most of those main elements remain on the Senate’s shelf.

Obama’s proposed $250 bonus payment to Social Security recipients is dead for the year, having lost a Senate vote last month.

What’s going ahead instead are small-bore initiatives. That includes modest help for small business or simple extensions of parts from last year’s economic stimulus measure. None is expected to make an appreciable dent in an unemployment rate, stubbornly stuck at 9.7 percent, which is more that double what it was three years ago.

Even legislation to help the jobless has run into trouble now that Republicans, following the lead of the tea party movement, have decided to make trillion-dollar-plus budget deficits a campaign issue.

Before Congress went on spring break, Republicans blocked a one-month extension of health insurance subsidies and additional weeks of unemployment insurance for people who have been out of work more than half a year.

“You never know in politics when that magic moment comes when things really begin to change, but I believe that it has occurred now,” said Arizona Sen. Jon Kyl, the second-ranking Republican. “I think you’ll see a much greater commitment now to fiscal responsibility.”

The idea of a jobs agenda arose late last year when the unemployment rate hit 10 percent and Democrats voiced concern that the majority party wasn’t doing enough to spur job creation. In December, House Democrats passed a $174 billion measure focused on public works spending, aid to the jobless and help to struggling state and local governments.

In the Senate, Majority Leader Reid, D-Nev., handed the issue over the Sens. Dick Durbin, D-Ill., and Byron Dorgan, D-N.D. They devised the $83 billion plan, focused on small business, infrastructure projects, energy efficiency and support for public sector jobs.

The plan absorbed a critical setback when the Senate Budget Committee chairman, Sen. Kent Conrad, D-N.D., came out against using bailout funds to pay for it.

Since then, the measure has languished. The election of Sen. Scott Brown, R-Mass., robbed Democrats of their filibuster-proof 60-vote coalition. Concerns about the rising national debt also sapped momentum.

Democrats and Obama have had one legislative victory on the jobs front. With bipartisan support, they passed legislation giving companies that hire the unemployed a payroll tax holiday through the end of the year.

When the Senate returns Monday, the first order of business will be trying to restore a one-month extension of health insurance subsidies and emergency unemployment aid for people who have been out of a job for more than six months. Republicans stopped a monthlong, $10 billion temporary jobless aid measure last month and insisted that the measure not add to the deficit.

Democrats are optimistic that the jobless aid will pass — first as $10 billion stopgap and then as part of a broader bill extending the benefits through the end of the year. The second, larger bill includes aid to cash-starved state governments, higher Medicare payments for doctors and an extension of several tax breaks.

That larger measure, to be financed mostly by adding almost $100 billion to the debt, is the biggest piece of the jobs agenda with a good chance to pass into law. But it doesn’t contain any new ideas for jump-starting the economy. It just extends elements of Obama’s $862 billion economic stimulus package, which is earning uneven reviews with voters.

There’s a complication. Since provisions of the larger Senate measure designed to pay for tax cuts have been tapped instead to pay for the just-passed health care overhaul, Democrats need to find about $30 billion in replacement revenues — a tall order.

The dilemma hasn’t gotten much attention on Capitol Hill, but is threatening to delay the extension of the tax breaks. That includes a popular research and development tax credit, and a tax deduction for sales and property taxes for people from states without an income tax. The lapse of a tax credit for makers of biodiesel already has hurt producers of the alternative fuel.

Also ahead for lawmakers in April and May is overhauling how the government regulates banks in response to financial meltown in 2008, and passing spending bills to cover the wars in Afghanistan and Iraq.