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Reid Loses, Taxpayers Win, Senate Dems to Try Again



October 21, 2011

“It’s very clear that private sector jobs have been doing fine,” Majority Leader Harry Reid said on the Senate floor earlier this week. “It’s the public sector jobs where we’ve lost huge numbers, and that’s what this legislation is all about.”

The legislation Sen. Reid was referring to was a $35 billion piece of President Obama’s larger American Jobs Act. Obama’s larger plan – a mishmash of temporary tax relief, reheated spending ideas, and permanent tax hikes – went down in flames in the Democrat-held Senate. Rather than pull back and focus on areas of bipartisan agreement, Democrats decided to try and advance the plan piecemeal.

In a move that was clearly aimed at shoring up their base, the package included $35 billion in grants to create or retain various public sector jobs such as teachers and police officers. The underlying premise of the bill, hinted at by Sen. Reid’s comments above, is that the recession is wreaking havoc on state budgets, forcing them to layoff public sector workers.

But as we found out in the last week, that’s simply not the case. “Overall state spending continued to climb right through the recession,” writes John Merline for Investor’s Business Daily after examining reports by the National Association of State Budget Officers’ annual reports. Indeed, he finds that state outlays in 2010 were almost 10 percent higher than in 2008 and general fund spending is projected to climb 5.2 percent in 2011. Total state outlays in 2010 were almost 10 percent higher than in 2008.

In other words, this is less a plan about jobs than about politics. Or as National Review labeled it, “No Bureaucrat Left Behind.”

Unsurprisingly, the bill was defeated with bipartisan opposition last night, with three members of the Senate Democratic Caucus – Sens. Mark Pryor (D-AR), Joe Liberman (I-CT), and Ben Nelson (D-NE) – joined with Republicans to block debate on the package.

“I don’t think you increase taxes for new spending,” said Sen. Nelson in explaining why he voted against the ill-conceived bill. Senator Pryor added, “I’m not sure federal taxpayers should be paying for teachers and first responders. That’s traditionally a state and local matter.”

NTU applauds those who voted down the bill. The bipartisan opposition should have been the latest signal to President Obama and Senate Democrats to move away from the current tax-and-spend approach to jobs legislation.

Sadly, it doesn’t appear they got the message. Early reports indicate that Senate Democrats will announce a new bill today to create a national infrastructure bank combined with a 0.7 percent surtax on those who earn more than $1 million. As NTU has argued before, if immediate job creation is the priority, an infrastructure bank is the wrong way to go. Between the time necessary to set up and staff an entirely new bureaucracy and then receive and choose viable loan applications, we’re talking months, if not years, of lag time.

If the Senate is truly concerned about job creation, we encourage them to look at the numerous proposals that have been already been passed by the House. These include bills to eliminate the burdensome regulations preventing businesses from expanding, increase domestic energy exploration, and to reduce the unsustainable spending and borrowing that has eroded economic confidence.

No matter what Sen. Reid may say, the private sector is not doing “just fine,” and Senate Democrats’ current tack will do nothing to improve that.


 

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