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The House’s Local Jobs Bill – Actually a Jobs Bill!

Obviously it hasn’t run through the legislative wringer yet, but the Local Jobs For America Act proposed by House Education and Labor Secretary George Miller looks like an exceedingly good piece of policy. It would provides through the community development block grant program $100 billion dollars to create local jobs through state and municipal budgets. Miller claims he could create or save a million jobs with that money, and I have no reason to doubt him.

Specifically, the Local Jobs for America Act invests:

$75 billion over two years to local communities to hire vital staff
Funding for 50,000 on-the-job private-sector training positions

The bill also includes provisions already approved by the House:

$23 billion this year to help states support 250,000 education jobs
$1.18 billion to put 5,500 law enforcement officers on the beat
$500 million to retain, rehire, and hire firefighters

The money would go directly to local governments:

The House proposal also lacks specific infrastructure funding, but its structure reflects a shift that could hearten urban planners and other advocates for a more city-centric approach to federal transportation funding. Three-quarters of the bill’s estimated $100 billion in aid would go directly to cities and counties to help avert layoffs of firefighters, police, and other workers.

Mayors had pressed for more transportation stimulus spending to go directly to cities but lost the political battle, as the lion’s share of the $48 billion in road and transit aid in last year’s recovery package was diverted through state DOTs. Many urban governments anticipate budget shortfalls in 2010 that could exceed those at the height of the financial crisis, with transit cuts and delays in infrastructure projects looming as consequences of the cash crunch.

That makes this bill not necessarily a left-right issue. Local mayors are hard to ignore for members of Congress. They may represent your next opponent. They may represent a key GOTV group. And they’re all going to want this money, be they Democratic or Republican. Mayors will head to DC to lobby for this bill next week.

This would help close serious budget gaps and increase aggregate demand, particularly where it’s most strained right now, at the level of public services. And Miller would not fund this with offsets, although Blue Dogs may howl. The way to increase demand is to actually increase demand.

“I think this should be considered part of the recovery,” Miller said. “In this economic downturn, this should be funded out of the deficit.”

Miller argued that the deficit would be worse if Congress allows local governments to continue to lay off workers in order to balance their budgets — in addition to raising taxes.

“We are not going to cure this deficit if we continue to lay people off,” Miller said. “You cannot cure a deficit when you are running with 15 million people unemployed in the country, and you cannot cure it at the local level by laying people off and raising taxes.”

Between this, the job creation tax credit bill and the $140 billion in tax extenders and social-safety net spending, you’re talking about close to $300 billion, and that’s without the HomeStar program on energy retrofit rebates. That approaches the annual funding level of the stimulus package, which has worked, although it was a bit too small.

You can hear a conference call with Miller and Rep. Keith Ellison, talking about the Local Jobs For America Act, at this link.

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David Dayen

David Dayen