Taxpayer's Tab: H.R. 1617, the Emergency Jobs to Restore the American Dream Act

Legislative Spotlight: H.R. 1617, the Emergency Jobs to Restore the American Dream Act

Faced with a struggling economy and rising unemployment figures, President Obama signed the American Recovery and Reinvestment Act (ARRA) into law in February 2009. This large "stimulus" package was the President's first major legislative victory, and was designed to minimize the negative impact of the Great Recession through a combination of tax credits and new spending initiatives. The ARRA included $288 billion in tax credits for families and individuals, including expanded homebuyer, Alternative Minimum Tax, and college student credits. Businesses were also eligible for certain tax breaks, such as renewable energy production credits and expanded refund provisions.

The majority of ARRA's cost came in the form of increased federal spending. State and local governments received $144 billion in transfer payments to help balance their budgets and keep employees on the payroll. Approximately $357 billion went toward funding new and existing programs with a variety of purposes, such as green energy development, job training, and infrastructure projects. Though the bill was initially scored by the Congressional Budget Office (CBO) as a $787 billion cost, CBO later revised that estimate up to $831 billion.

The President and many progressive Members of Congress hoped that the ARRA would offer Americans some economic relief in the midst of one of the deepest recessions in decades. Some economists justified the bill as an application of Keynesian economic theory, in which government spending is thought to increase consumer demand and gradually return employment and tax revenues to more stable levels in times of recession. Nearly four years later, though, the ARRA's effectiveness is still uncertain at best. Unemployment (particularly long-term) is still higher than many had hoped it would be, and many of the programs did not create more stable economic conditions. Additionally, a number of spending programs and tax credits enacted under ARRA are still in place, even though the package was offered as a temporary solution. Criticism of ARRA's legacy comes from both sides of the aisle, as conservatives are generally displeased with the deficit spending that ARRA required, while some progressive Congressmen and economists claim that the "stimulus" programs should have spent even more. In either case, Americans still face a challenging economic -- and budgetary -- outlook going forward.

Congresswoman Jan Schakowsky (D-IL) introduced H.R. 1617 in mid-April in order to continue funding for certain ARRA initiatives, as well as new programs designed to provide jobs and economic relief. Representative Schakowsky said that the nation's "unemployment rate remains unacceptably high, and job growth took a major hit last month as our economy begen to feel the impacts of the automatic spending cuts ... . We need to increase hiring by investing in American communities, public lands, and infrastructure."

Her bill would authorize $227.8 billion in new federal obligations over a five-year period with the goal of employing 2.2 million U.S. residents. Compared to the May jobs numbers from the Bureau of Labor Statistics, Representative Schakowsky's bill would decrease the number of unemployed Americans actively looking for work -- currently at 4.4 million -- by 50 percent, assuming it works as promised.

H.R. 1617 would focus federal spending in seven specific areas. They are highlighted below, along with some background information on current spending patterns within those programs.

• School Construction: A new School Improvement Corps would devote $80 billion in additional funding to modernize, renovate, or repair public school facilities. As part of the grants, education administrators would be permitted to retrofit buildings for energy efficiency, upgrade technology infrastructure, and "reduce or eliminate human exposure to classroom noise and environmental noise pollution." Priority would be given to projects to remove proven carcinogens, like asbestos, from classrooms. The sponsor claims this would lead to the creation of 400,000 jobs. FY 2013 Existing Federal Spending: $17 million¹, Proposed Spending: $80 billion.
• Community Corps: On a more local level, the new Community Corps would enable funding a host of miscellaneous repair and maintenance activities under the supervision of local leaders. Among other activities, 750,000 jobs would be provided to help weatherize homes, conduct rural conservation work, and collect recyclable materials. FY 2013 Existing Spending: $6.4 billion², Proposed Additional Spending: $60 billion.
• Neighborhood Heroes Corps: Under this teacher stabilization proposal, the Department of Education would be charged with retaining, rehiring, or hiring 300,000 education professionals and support staff. Local districts would be prohibited from covering current expenses and states would not be allowed to establish or replenish rainy-day funds. FY 2013 Existing Spending: $3.0 billion³, Proposed Additional Spending: $40 billion.
• School Maintenance: An additional $20 billion for the School Improvement Corps would be reserved for maintenance of public schools. Districts would get funding for building upkeep that fall under routine repairs as per local laws and regulations. Grants would be allocated to states in proportion to how much money they receive in federal assistance for low-income education, known as Title I of the Elementary and Secondary Education Act. According to the sponsor, this spending would create approximately 250,000 jobs. FY 2013 Existing Federal Spending: $5 million¹, Proposed Spending: $20 billion.
• Community Oriented Policing Services (COPS): COPS grants are currently used to coordinate local law enforcement entities and to address conditions of concern related to crime. H.R. 1617 would require the hiring or rehiring of 40,000 additional law enforcement officers. States and districts that requested grants last year would receive priority in getting more police and administrative workers. FY 2013 Existing Spending: $655 million, Proposed Additional Spending: $10 billion.
• Health Care Corps: In light of the demands put on health professionals during not only the recession but through the implementation of the so-called Affordable Care Act, H.R. 1617 would authorize increased spending to hire and retain at least 40,000 health care providers. Seventeen kinds of professionals would be eligible to work in 13 types of medical facilities. FY 2013 Existing Spending: $300 million⁴, Proposed Additional Spending: $8 billion.
• Child Development Corps: Head Start has been in the news since President Obama proposed an expansion of federal funding for state and local pre-kindergarten programs. The program provides early education to low-income families by teaching health, nutrition, and social services. H.R. 1617 calls for an additional 100,000 Head Start employees and infant and toddler specialists. FY 2013 Spending: $8 billion⁵, Proposed Additional Spending: $6 billion.
• Firefighter Corps: This section would provide additional funding for existing program that assist firefighters and fire prevention efforts. If H.R. 1617 was enacted, the sponsor states the new spending would lead the hiring or re-hiring of 12,000 firefighters. FY 2013 Spending: $679 million, Proposed Additional Spending: $2.4 billion.
• Student Jobs Corps: This provision would provide 250,000 students with part-time work-study jobs. Building on the Federal Work-Study Program, the intention is to help low-income students offset some of their higher education expenses while providing work experience. FY 2013 Existing Spending: $1.2 billion, Proposed Additional Spending: $850 million.
• Park Improvement Corps: The Public Land Corps employs young adults to work on land managed by the Department of the Interior and other federal agencies. Its mission includes building conservation infrastructure, preventing wildfires, and fighting invasive species. As a partnership between the Departments of Agriculture and the Interior, the Corps would receive additional funds to create an additional 100,000 jobs for the purposes of creating, maintaining, and supporting conservation projects. FY 2013 Existing Spending: $12 million, Proposed Additional Spending: $625 million.

In total, the Emergency Jobs to Restore the American Dream Act would increase spending by $227.9 billion ($45.6 billion, annually). All of this funding would be in addition to existing federal resources for the related programs. Though H.R. 1617 authorizes a majority of the spending to occur between Fiscal Years 2014 and 2015, NTUF assumes that the allocation and distribution of the funds would take place over a five-year period. This is consistent with how CBO has scored previous legislation, such as ARRA or the American Jobs Act, an economic stimulus package proposed by the President in 2011.

As introduced, H.R. 1617 does not include any spending offsets or revenue provisions. However, the sponsor's press release about the proposal notes that it "[c]an be fully paid for through separate legislation such as Rep. Schakowsky's Fairness in Taxation Act, which creates higher tax brackets for millionaires and billionaires, eliminating subsidies for Big Oil, and eliminating tax loopholes for corporations that ship American jobs overseas."

Imposing higher taxes on households making over $1 million per year (as Representative Schakowsky has proposed in H.R. 1723, the Fairness in Taxation Act of 2013) could bring in up to $849 million in revenue over a ten-year period (or approximately $84.9 billion per year), according to Citizens for Tax Justice. NTUF also examined the possible effects and uncertainty of eliminating tax credits for oil and gas companies while allowing other energy sectors to enjoy similar benefits. Additionally, there is no specific loophole for companies that "ship job overseas." This is a regular cost that can be deducted. However, the Joint Committee on Taxation and The Washington Examiner note that a new penalty to target companies moving offshore could amount to $14 million annually.

¹ Impact Aid funding for construction and facilities maintenance, respectively. According to a November 2010 report from the National Clearinghouse for Educational Facilities, there are numerous federal grant and bond programs that allow the use of funding for facilities, but that "[l]ess than one tenth of a one percent of the total capital outlay for facilities is paid for with federal grant funds."
² This only includes the estimated FY 2013 outlays through the Community Development Fund in the Department of Housing and Urban Development (HUD). This proposal may also be similar to other current programs such as HUD's brownfield development program.
³ Including funding related to hiring and training available through various Department of Education programs, such as the Improving Teacher Quality State Grants, the Teacher Incentive Fund, TEACH Grants, and Teacher Loan Forgiveness.
⁴ This includes funding for the National Health Service Corps. The Department of Health and Human Services' budget also includes several other programs that provide funding that can be used for hiring incentives, training, and workforce development.
⁵ In addition, the federal budget includes $2.3 billion for the Child Care and Development Block Grant.

About NTUF

The National Taxpayers Union Foundation is a research and educational organization dedicated solely to helping citizens of all generations understand how tax policies, spending programs, and regulations at all levels affect them now and in the future. Through NTUF's timely information, analysis, and commentary, we're empowering citizens to actively engage in the fiscal policy debate and hold public officials accountable every day.

NTUF is a 501(c)(3) research and education organization. Donations are deductible for personal income tax purposes. Please make a donation today to help further NTUF's mission of research and education!

This information is for educational purposes only and is not intended to aid or hinder the passage of any legislation or as a comment on any Member's fitness to serve. Cosponsor information obtained from GovTrack.us.