The Jobs for Main Street Act extends several expiring safety-net programs and seeks to spur job creation at a cost of $174 billion. The Act includes funds for infrastructure and public sector employment and extends assistance for the unemployed. The bill allocates almost $50 billion for infrastructure projects, including $27.5 billion for highways and $8.4 billion for public transportation. Additional funds are provided for Amtrak, airports, water infrastructure, renewable energy projects, and school renovation. Assistance is included for renters and for the construction and rehabilitation of rental and public housing. The legislation directs $26.7 billion to support employment in the public sector and funnels most of the money through state governments to maintain and create additional jobs in education. The infrastructure and public sector employment provisions total $75 billion in spending and their budgetary cost is offset by savings from the Troubled Asset Relief Program.
The Act continues several expiring programs included in the American Recovery and Reinvestment Act at a cost of $79 billion. The bill provides $41 billion to extend the unemployment benefits program for six months and to maintain a provision providing $25 in additional weekly benefits to Americans who cannot find work. The legislation expands to 15 months the time period during which unemployed workers are eligible for a subsidy for COBRA health benefits, a federal program that allows unemployed individuals to receive health insurance coverage through their former employer’s health plan. Currently, laid-off workers are only eligible for 9 months of subsidized benefits. Workers who lose their jobs before the end of June of 2010 will be eligible for the subsidized benefits. The cutoff for eligibility is now the end of 2009. The legislation continues the stimulus package’s expanded childcare tax credit and includes funds for small business loans. Finally, the Jobs for Main Street Act extends by six months the increased rate at which the federal government matches state Medicaid spending at a cost of approximately $23.5 billion.
Additionally, the Jobs for Main Street Act reauthorizes the surface transportation bill, which includes federal funding for highways and public transportation, for nine months.
The Middle-Class Position:
Middle Class Supports. While the American Recovery and Reinvestment Act stimulated economic growth and created between 600,000 and 1.2 million additional jobs, the employment situation remains grim. The unemployment rate stands at an extraordinary 10.0 percent and more than 15 million people are jobless. There are six job openings for every worker who wants a job, while almost 40 percent of the unemployed have been jobless for longer than 26 weeks. In short, the stimulus package was necessary, but insufficient. Further, several of the most important provisions in the stimulus package, including extended unemployment benefits and health insurance assistance for the unemployed, are set to expire before the employment outlook has improved.
The Jobs for Main Street Act expands assistance for the aspiring middle-class and middle class Americans affected most by the economic downturn while allocating additional funds that can create and save jobs quickly. Without the Act’s extension of unemployment insurance, 1 million workers will run out of unemployment insurance in January and 3 million will run out by the first quarter of the year. Unemployed families relying on subsidized COBRA insurance could see their premiums skyrocket from $389 a month to $1,111 per month. Further, workers who lose their jobs in 2010 would receive no help with their COBRA premiums. Extending these invaluable programs would not only continue to assist cash-strapped middle-class families, but would help ensure that these households can continue to support the economy by spending on everyday necessities.
Additional spending included in the Jobs for Main Street Act will create jobs and further stimulate the economy. Recent research by the Federal Reserve Bank of New York demonstrates that government spending at this time will result in well over $2 in economic activity for every dollar spent, although new tax cuts would in fact shrink the economy. Aid to states for infrastructure projects, education, and public safety will create and maintain employment and preserve important services. These funds will prevent cash-strapped states from cutting public services at a time Americans most need them and will encourage additional public sector hiring. Indeed, funding for education in the original stimulus package similar to that included in the Jobs for Main Street Act created or saved more than 300,000 jobs. The maintenance of the increased federal share of Medicaid payments will serve a similar function in addition to preventing reductions in health care for low-income children and adults. The Jobs for Main Street Act invests significant resources in areas that can generate both economic activity and jobs for middle-class Americans.
From the Experts:
“The predictable argument against a plan like this is that we can’t afford to do it. In fact, we can’t afford not to do it. We simply cannot address the deficit without first creating jobs and ensuring a sustained economic recovery. By far the biggest factor contributing to the spike in the budget deficit this year is that the recession has led to massive job losses and, consequently, reduced tax revenues.” –Lawrence Mishel, President, Economic Policy Institute (December 15, 2009)
“There is no time to waste to reauthorize the jobless benefits and health care subsidies that are now the lifeline for millions of jobless Americans hardest hit by the recession. Despite the crucial weeks of extensions Congress passed earlier this month, the looming question is what happens next year, if the entire ARRA unemployment package expires with nothing in its place…Any delay reauthorizing the ARRA will have devastating consequences not just for workers and the struggling communities hardest hit by the recession.” –Christine Owens, Executive Director, National Employment Law Project (November 18, 2009)
Beyond this Bill:
Congress has had significant difficulty crafting programs that address the severity and duration of the unemployment situation. Though the continuation of unemployment benefits and the COBRA subsidy are welcome, Congress should consider tying the expiration of these programs to significant reductions in the unemployment rate rather than enacting ad hoc extensions. Additionally, when the Senate takes up the Jobs for Main Street Act, it should consider creating a program for the federal government to hire workers directly. Such direct employment by the federal government would create jobs immediately without the increased bureaucracy involved with funneling money through state and local governments. Spending could be easily targeted at worthy, large-scale infrastructure projects.
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