The 62 to 30 vote yesterday that cleared the way for the Senate to approve a jobs tax credit today exposed the first cracks in the virtual wall that the GOP has constructed in the halls of Congress. Five Republicans broke ranks and joined with Democrats to move the bill forward.
The $13 billion plan gives companies who hire the unemployed an exemption from paying payroll taxes on those workers until the end of 2010, and provides a $1,000 tax credit to employers who keep new workers on the job for at least 52 weeks.
The bill is described by many Senate Democrats as a simple way to create tens of thousands of jobs, but it is widely seen as far too small to significantly impact the nation's high jobless rate.
The labor-backed Economic Policy Institute said that more than 400,000 jobs a month need to be created for at least three years just to recoup the jobs lost during the current recession.
Estimates are that the Senate's tax credit will only create about 20,000 jobs per month through the end of this year.
Progressives were encouraged, however, by what they saw as a small step forward and the first signs that Republicans cannot forever operate by killing jobs, health care and other programs the public supports.
Noting that Massachusetts Republican Sen. Scott Brown was among those who broke ranks with his party, Politico's Ben Smith said, "He's choosing a shot at re-election in Massachusetts and a shot at power in the Senate over conservative stardom."
Black lawmakers note that a problem with the Senate tax credit bill, like the bigger Senate jobs bill and the $154 billion jobs bill passed last December in the House, is that it does nothing to funnel help to low-income communities.
They note that unemployment is highest among workers who had little to begin with, and while the jobless rate among those earning $100,000 or more is 4 percent, the rate among workers earning less than $12,500 per year is a catastrophic 34 percent.
Cognizant of this, Jobs for America Now, a coalition of 64 labor, civil rights and community organizations, reiterated its call yesterday for a $40 billion government program to create huge numbers of public service jobs in hard hit communities across the nation.
The coalition's five-point program also calls for extensions and increases in unemployment benefits, COBRA health insurance assistance and food stamps, massive government spending to improve transportation and infrastructure, and a job creation tax credit larger than the one approved in the Senate.
Another major concern with the bigger Senate jobs package is that as state tax revenues are taking a nosedive the bill does not provide aid to state governments.
The New York Times reported today that state tax collections shrank at the end of 2009 for a fifth consecutive quarter, the longest period of continuing state revenue decline since at least the Great Depression.
The president of the San Francisco Federal Reserve Bank, Janet Yellin, said yesterday that "even as the economy starts to grow again, employers are likely to continue squeezing more productivity out of workers rather than start hiring new ones, thereby prolonging the crisis for millions of unemployed." That bolsters the arguments of those who say a massive federal role in direct job creation is needed.
Democrats, meanwhile, are stepping up a campaign against GOP stimulus "hypocrites" who condemn jobs programs on the one hand but then take credit in their home states for jobs programs they opposed in Washington.
Democratic leaders announced that they have identified 120 Republican lawmakers and governors who are doing this "double talking." The Democrats said they plan to bring the campaign to the Internet and feature it in television and radio ads.