Legislators hoping for big ideas in president’s jobs speech

WASHINGTON–Lawmakers in the Connecticut delegation say they don’t want President Barack Obama to launch the jobs debate this week with a small-bore, nibble-around-the-edges proposal.

With the August jobs report showing zero growth, unemployment stuck at 9.1 percent, and economists fearing a double-dip recession, Democrats like Rep. John Larson say the moment calls for big and bold.

“Nothing short of FDR, Harry Truman and Lyndon Johnson–if we can combine the New Deal, the Fair Deal and the Great Society,” the 1st District Democrat said when asked what he wanted to hear from Obama on Thursday, when the president is scheduled to outline a jobs package to a joint session of Congress.

Rep. Jim Himes, D-4th District, said he hopes Obama will outline a sweeping infrastructure program, broad educational investments, and an overhaul of the tax code that includes lower corporate rates.

“I want to hear him say we’re going to get very serious about putting together a world-class infrastructure” that revamps on everything from key highways to airports to energy and environmental projects. “And we need to educate our workers at every level.”

Whether Obama will deliver an expansive proposal, or take a narrower, more practical tack, remains to be seen. And whether any economy-revving legislation–big or small-will pass this deeply-divided Congress is also far from certain.

Most Republicans have already signaled staunch opposition to a second stimulus package, saying the first one passed in 2009 was a failure and only served to plump up the nation’s debt. And the GOP has its own ideas about how to juice the economy, with a plan to target environmental, workplace, and other regulations that Republicans say are burdening businesses and stifling growth.

“The president’s stimulus spending has proven counterproductive. Government has gotten in the way when it can be part of the solution,” Rep. Bob Goodlatte, R-Va., said Saturday, in the GOP’s weekly radio address. “We can start by eliminating burdensome mandates and regulations,” he said in a preview of the GOP’s fall agenda.

And even as lawmakers pivot from July’s rancorous debate over raising the debt ceiling to the sour economy, debt-reduction will still loom large. A special new committee will begin work this week on a package to reduce the federal budget by at least $1.2 trillion. That panel’s work could run smack into efforts to create jobs through additional federal spending.

“The debt-ceiling deal was a job killer, not a job creator,” said Rep. Chris Murphy, D-5th District.

Under these circumstances, some political analysts say the looming economic debate could do more to define the 2012 presidential election than to drive this fall’s congressional agenda.

“While we can’t rule out the possibility that the congressional super-committee may roll some of [Obama’s jobs] proposals into an overall deficit reduction package, it seems more likely that the president will be setting the stage for a general election argument about the best way forward for the beleaguered U.S. economy,” William A. Galston, a former advisor to President Bill Clinton, wrote in a recent article urging Obama to outline an aggressive jobs package.

The White House has so far signaled a more narrow focus, with Obama poised to call for targeted infrastructure spending, including a possible school construction plan and a long-term highway bill. The president may also call for renewing a payroll tax cut holiday, and offering businesses tax credits for any new employees they hire. He’s also expected to call for an extension of unemployment benefits, among other things.

Murphy said he could support the tailored tax provisions being floated by the White House, as well as the infrastructure spending. But he said he’d like to see the White House embrace a broader push to revive American manufacturing, starting with the House Democrats’ “Make it in America” agenda.

That platform includes several provisions Murphy has long pushed to use federal procurement dollars to favor U.S. suppliers over foreign competitors. “I want to see a focus on spending current appropriations on American jobs,” Murphy said, adding that a retooling of federal contracting rules to support domestic industries would not cost extra federal dollars.

Himes, for his part, said the president’s tax cut and infrastructure proposals appear to be too modest or ill-defined.

For example, Himes questioned the impact of a nation-wide school construction program, one idea being touted by top Obama advisors. He said other infrastructure spending could get more bang for the buck.

“What are the top ten projects in the United States that will move the economic needle the most? It’s not clear to me that school construction is on that list,” Himes said. “I would like to compare the economic impact of $3 billion spent on school construction against $3 billion spent on a New York Harbor rail tunnel, which would have a dramatic positive economic effect.”

The White House should be talking to economists and other experts to draw up a list of what investments would give the country the “maximum return on investment,” in terms of jobs and economic growth, Himes said.

Himes also expressed skepticism about the value of a tax credit for hiring new employees or extending the payroll tax holiday.

“Businesses do not hire because the payroll tax is marginally lower,” said the former Goldman Sachs investment banker. “They hire because there’s demand for their products.”

What’s needed, he said, is a broader approach that eliminates tax loopholes, in exchange for a lower overall corporate tax rate.

As for the GOP’s regulatory reform agenda, Himes and others said they would support a review of existing federal rules to make sure there was a good balance that ensured public health and safety without unnecessarily straining the private sector.

Murphy, for example, said he could support an overhaul of environmental clean-up rules for abandoned industrial sites known as brownfields. “We’ve got an enormous amount of old industrial properties” in the 5th District that could be redeveloped, he said. “I’d love to put some more common-sense brownfield clean-up laws on the books.”

But, Murphy and others said, regulatory reform shouldn’t be seen as a substitute for job creation.

“It’s terribly important that we not have regulations that are counterproductive,” Himes said. “But positioning reducing regulations as a near-term job creator is utter and complete baloney… Even if you allowed every chemical company to dump the most poisonous stuff” into the nation’s rivers and lakes tomorrow, he said, it won’t create any new jobs.

Larson similarly said that much of the GOP talk about regulation was aimed at undermining federal agencies, such as the Environmental Protection Agency. He said his constituents aren’t interested in such partisan brawls.

And given the early skirmishes in this looming debate, he’s skeptical the two parties will come together on a comprehensive jobs deal before the end of the year. That’s why he’s pushing to add the job-creation mandate to the special debt committee’s to-do list.

On Friday, Larson introduced legislation that would require the committee, or a second panel working in parallel, to make recommendations to reduce unemployment. The package would be subject to an up-or-down vote in the House and Senate, just as the debt-reduction package is.

He said he’s worried the White House “won’t be as bold as we’d like” and that Republicans won’t agree to much of it anyway.

Adding a jobs-bill mandate to the special committee’s work will “enhance the chances of [the two parties] coming together immeasurably,” Larson said, because it subjects Congress to a hard deadline and forces an automatic vote. And it fits in with debt reduction, he said, because if the nation’s unemployment rate drops, those newly-hired workers will be paying taxes again.

Larson has about 60 co-sponsors in the House for one version of his proposal, but they’re all Democrats so far. He said he’s talked to the White House about his idea, “but they’re saying the president has a plan and that Congress ought to be able to take up that plan.”

Larson said he’d be thrilled if Congress moved to a quick debate on Obama’s proposal–whatever it is. But that seems unlikely. His bill is a “failsafe” in case politics intervenes.