With the mind-boggling budgets and deficits of recent years fogging the judgment of many, Reuters, referring to the $15 billion bill as “a modest jobs-creation bill” noted that it “laid the groundwork for a larger package that would advance Democrats’ goal of bringing down the stubbornly high U.S. unemployment rate.” However, whether this bill — or any other federal appropriation — will have any meaningful, lasting impact on the alarmingly high rate of unemployment remains doubtful. What the bill’s passage does demonstrate is the danger of legislative incrementalism; that is, spending that would be politically untenable in a single bill becomes more palatable when chopped into smaller appropriations, which are then approved sequentially.
After the bill passed by a 70-28 vote — clearly receiving the support of a significant number of Senate Republicans, including that of the newly-elected Scott Brown (R-Mass.) — the Democrat leadership in the Senate began to press an even larger bill in the immediate future. According to Reuters:
Immediately after the vote, Senate Majority Leader Harry Reid said he was readying a package of jobless benefits, state aid, and tax breaks that the Senate could take up next week.
Democrats are also preparing a bill to boost lending to small businesses that could use money left over from bank bailout, he said.
"Today's progress is a small step forward, and an important step forward," Reid said. "We have other things in mind."
The Obama administration has been greedily eyeing the supposed "TARP surplus" for precisely such purposes for some time now. The roughly $700 billion program has thus become a “slush fund,” in the estimation of some analysts — an assessment that received further validation in Reid’s remarks.
According to Reuters,
Reid plans to pass a series of smaller jobs bills that would avoid the sticker shock of the larger House bill and keep their job-creating efforts in the news.
But the next bill could carry a much higher price tag. Extending jobless benefits for an entire year, as Reid intends, would likely cost more than $100 billion.
He has also begun to characterize as "jobs bills" other legislation not directly aimed at boosting the economy, such as the massive healthcare reform effort now stalled in Congress.
How pouring $100 billion of deficit spending into paying people not to work can be considered a “jobs bill” is incomprehensible outside of the “double-speak” world of Washington, D.C. But it is clear that such mislabeled spending is likely to increase, even as the rate of the unemployed continues to increase. The Wall Street Journal reports:
The Labor Department Thursday said initial claims for jobless benefits rose by 22,000 to 496,000 in the week ended Feb. 20, reaching the highest level since the week of Nov. 14, 2009. A survey by Dow Jones Newswires expected a drop of 13,000.
A Labor Department economist attributed the increase partly to an administrative backlog in states slammed by snowstorms and also because the weather temporarily idled workers.
The four-week moving average of new claims rose for the week ending Feb. 20, by 6,000 to 473,750.
"The progress toward an 'improving' labor market climate (initial claims below 400,000) — as opposed to a 'less-bad' climate- has come to a halt," ClearView Economics analyst Ken Mayland wrote.
As new claims for unemployment near the 500,000 per week level, and the sale of new homes crashes to a fifty-year low, the failure of the present course of action becomes clear.
Photo of Senate Majority Leader Harry Reid, (D-Nev.): AP Images