Congress could this week enact legislation, if it chose to, that would create more than 5 million jobs in the economy over the next two years. That works out to more than 208,000 jobs a month, well above the average of 132,000 jobs a month that have been created over the last 11 months of this year.
That’s the conclusion of an Economic Policy Institute analysis of the Restore the American Dream for the 99% Act, which was introduced in Congress Tuesday by the leaders of the Congressional Progressive Caucus. The EPI said that the key provisions of the bill “would increase nonfarm payroll employment by almost 2.3 million jobs in 2012 and almost 3.1 million jobs in 2013.”
Here’s how you create 5 million jobs in two years, according to EPI:
- Authorizing a program of federally funded direct job creation would boost employment by approximately 1.1 million jobs in each of fiscal years 2012 and 2013. The Restore the Dream legislation would establish several “corps” of direct-hiring programs directed at such targets as youths in high unemployment areas; idle construction workers who could be deployed on school refurbishing projects; and laid-off police, firefighters, teachers and health care workers.
- Continuing the Emergency Unemployment Compensation program would boost employment by roughly 323,000 jobs in fiscal 2012 and 185,000 jobs in fiscal 2013. Republicans in particular are moving radically in the opposite direction, having passed a bill in the House Tuesday that would reduce the maximum duration of long-term unemployment benefits from 99 weeks to 59 weeks. That loss of spending power among the long-term unemployed would actually cost the economy 140,000 jobs as the impact ripples through the economy, according to the National Employment Law Project.
- Reinstating the Making Work Pay tax credit for 2012 and 2013 would boost employment by 409,000 in fiscal 2012 and 532,000 jobs in fiscal 2013. This approach to putting more dollars into the hands of ordinary workers is preferable to the payroll tax cut for several reasons. The key reason is that payroll taxes are really premium payments toward Social Security, and reducing premium payments directly affects the soundness of the Social Security trust fund. True, the federal government is using the general fund to make up the difference. But don’t be surprised if conservatives, especially under a future Republican president, propose making the payroll tax cut permanent and ending the general fund payments into the Social Security trust fund in order to obtain their long-term goal of turning Social Security into a Wall Street privatization hustle. The Make Work Pay tax credit had roughly the same effect as the payroll tax cut for lower-wage workers, it was better targeted, and left the Social Security funding mechanism untouched.
- Reinstating the higher Federal Medical Assistance Percentages (FMAP) used to determine federal reimbursement for state Medicaid programs would boost employment by 349,000 jobs in fiscal 2012. This would be perhaps the single most important step the federal government could take to provide relief to state and local governments, which have led the hemorrhaging of jobs in the past year.
- Increasing federal surface transportation investments by $50 billion in the next decade would increase employment by 47,000 jobs in fiscal 2012 and 112,000 jobs in fiscal 2013. Even greater employment gains would be achieved in later years. Among the more critical needs are in rail infrastructure and public transportation: Amtrak ridership is breaking records, but investment in the system has not kept pace. And nearly 80 percent of the nation’s public transportation systems are facing subsidy cuts even though many of them are coping with increased demand.
- Defusing the automatic spending cuts currently scheduled under the Budget Control Act would boost employment by more than 1.1 million jobs in fiscal 2013. These automatic cuts would start with a $111 billion cut in fiscal year 2013, which begins in October. That cut would shave 1 percentage point off of gross domestic product growth; if the economy slows as the more pessimistic Wall Street analysts fear; that 1 percent could mean the difference between imperceptibly show growth and outright double-dip recession. The Restore the Dream bill would exceed the Budget Control Act requirements through a combination of cuts in defense spending, eliminating corporate welfare and tax increases that would primarily affect people earning more than $1 million a year.
Isaiah J. Poole was interviewed on Countdown with Keith Olbermann about the Restore the American Dream for the 99% Act. Read the interview »
Right now Congress is stalled on how to extend the payroll tax cut through 2012, thus avoiding a hit of as much as $1,000 a year on the paychecks of millions of workers at a time when the economy remains weak. If Congress has this much difficulty with something seemingly so simple, it is easy to dismiss the idea that Congress could act more boldly to put the economy back on track.
But that is why it is important to push the ideas in the Progressive Caucus legislation. “This is what legislators call ‘message legislation,’” Katrina vanden Heuvel writes in The Washington Post. “It has no chance of even gaining a hearing in the Republican-controlled House. It is designed to show what could be done if Congress had the will to deal with the challenges we face.”
It says that a demand that we create 5 million jobs in two years is not a pipe-dream. It is an urgent challenge that the nation can realistically meet. But first, the obstructions from conservatives and the cowardice of would-be allies have to be pushed aside.