Surprise! Reid Can’t Pass His Jobs Bill

Unbelievable. According to a report by Jay Heflin at The Hill, Senate Majority Leader Harry Reid can’t muster the votes to pass a $15 billion jobs bill.

This jobs bill has become truly bizarre remarkably fast. When Reid pulled the plug on the Senate Finance Committee’s $85 billion “bipartisan compromise,” he wasn’t being unreasonable– most of that bill was a load of Republican tax cut priorities totally unrelated to the jobs crisis. Unfortunately, the $15 billion package Reid rolled out to replace that lousy bill wasn’t much better. Reid’s version includes tax cuts more directly tied to employment, but tax breaks that are very unlikely to work.

Why won’t they work? This brings us to the really crazy part of the story. Infamous Blue Dog Sen. Bill Nelson, D-Neb., is actually talking economic sense! From The Hill:

“There’s a question of whether that puts the cart before the horse,” said Nelson. “If I don’t have enough customers for my product, hiring more people is not going to help and tax credits are not going to be to my advantage.”

Nelson is basically right. If there is no demand for whatever a business makes, providing that business with tax cuts won’t create any jobs. And right now there isn’t any demand in the economy because everybody is broke and out of a job.

An easy, serious response to the jobs crisis only needs two key measures, and neither of them are tax cuts: Expand unemployment benefits and provide federal aid to state governments. Unemployment benefits keep money in peoples’ pockets even when they’re out of work, giving them money to spend that businesses can actually sell things. Aid to states keeps government agencies from laying off teachers and cops. Throw enough money at both of these and you get good results. States need about $150 billion to cover budget shortfalls starting this year. Combine that with the unemployment benefits, and we get an absolute low-end for a serious jobs package of about $200 billion.

Given his track-record on health care and the stimulus package, I’m pretty skeptical that Nelson’s excuse for opposing Reid here is sincere. After all, one of the main reasons the economy has such a shortage of demand right now is directly a result of Nelson’s own political posturing. Early in 2009, Nelson helped lead a group of “centrists” determined to downsize Obama’s stimulus bill and convert Obama’s demand-creating government spending to economically useless tax cuts (for no reason). But he’s still right about the economics of Reid’s bill.

From a political perspective, I still don’t understand why Reid and Obama don’t just make the Republicans filibuster a serious package at least once. Republicans are not Obama’s friends, they’re his political adversaries, and they’ve proven that they can pick off safe Democratic seats by negotiating in bad faith and refusing to vote for anything. Obama and the Dems have absolutely nothing to lose by forcing the issue. With the public strongly backing a jobs bill, Reid could force the Republicans to actually filibuster it and create a huge public relations disaster for conservatives– imagine the public response to Senators reading the phone book to block a jobs bill. Instead, he’s preemptively gutting his own bill and backing down at the mere threat of a filibuster.