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President’s Job Ideas Could Include Public Works Funding of School Maintenance

Roosevelt High SchoolThe LA Times gets some more intelligence on what this September jobs package is going to be all about. And it includes one idea that, I think it’s fair to say, is finally a public works program:

The jobs package that President Obama plans to unveil shortly after Labor Day could include tens of billions of dollars to renovate thousands of dilapidated public schools and a tax break to encourage businesses to hire new workers, according to people familiar with White House deliberations […]

“I like the optics of it,” said Jared Bernstein, a former administration economics advisor and a proponent of the school rehab program. “It’s the public school in your community, not a bunch of folks on a distant highway.”

Supporters estimate that each $1 billion in school construction work would generate up to 10,000 jobs. A $50-billion program, for example, would underwrite half a million jobs by that calculation.

The average U.S. school building is 40 years old, and many are suffering from neglect — poor ventilation, energy inefficiencies and mold. A report by the American Society of Civil Engineers in 2009 gave the nation’s public school facilities a D grade.

This appears not to have gone past the talking stage. But previously, FAST – short for Fix America’s Schools Today – has only been touted by former Administration officials like Bernstein. Essentially you’re paying unemployed workers to fix schools. Maybe under the Administration’s purview it would be a loan of money to some private company because otherwise there would be fear that the President would turn the school fixers into some private army, but barring that, it’s an honest-to-goodness public works program. And the schools angle has a tug-at-the-heartstrings quality to it. The next idea will be a plan to groom all of America’s puppies or something.

It’s important to note that the AFL-CIO came up with this idea in the fall of 2009, and they didn’t stop at schools. They sought public works funding to clean up dilapidated foreclosed properties, or to provide child care. Alan Grayson had a bill on a modern-day Civilian Conservation Corps. The difference was that the AFL-CIO and Grayson and the rest were proposing them AT A TIME THEY HAD A SHOT TO PASS, when the number of people to convince was far lower. They didn’t propose them as a stunt, to force Republicans to say no and then take the case to the public. There’s some value in that, of course. But after talking for 18 months about deficit reduction and how it, not public investment, is the road to economic growth and security, the public may not accept the argument the same way.

There’s also talk about state aid for teachers being a facet of the package. Again, a good idea, one that they actually did pass with the EduJobs bill in fall 2010. But clearly state budgets are still strained, and public sector job losses are a drag on the economy.

As for a jobs hiring tax credit, we have one. This may be a different one (apparently it’s a tax credit based on hiring year-over-year), but Chuck Schumer and Orrin Hatch passed a bill that reduced hiring expenses in early 2010. I haven’t seen any metrics on whether it worked, but needless to say, hiring didn’t exactly take off in the intervening years. It’s gone pretty much the way you’d expect, with or without a job hiring tax credit – modest growth in the private sector, offset by public sector losses.

The President wants to combine these job creation strategies with long-term deficit reduction, and he plans to submit them to the Catfood Commission II. This is actually no different than what was rumored in the grand bargain he tried to reach with John Boehner. There were reportedly extensions of the payroll tax cut in there, as well as unemployment insurance. Obama wants to pay for the up-front jobs measures with big cuts resembling his grand bargain proposals.

“My basic argument to them is this: We should not have to choose between getting our fiscal house in order, and jobs and growth,” Mr. Obama told an audience Wednesday in Atkinson, Ill., on the final day of his three-day bus tour through Minnesota, Iowa and Illinois.

As for deficit reduction, Mr. Obama suggested that he would call in his speech for the bipartisan 12-member Congressional committee that was created by his debt-reduction deal with Republicans this month to be more ambitious about deficit-reduction than its formal charge requires — including tax increases on the wealthy, which Republicans oppose.

“I’m going to make a presentation that has more deficit reduction than the $1.5 trillion that they’ve been assigned,” he said.

He said the ultimate goal should be $4 trillion in savings over 10 years. Counting the $1 trillion in cuts already agreed to in the debt-limit deal, that would suggest that the committee — and Mr. Obama — would have find $3 trillion more. But he will not seek that much.

So there’s some undefined deficit reduction package of between $1.5 trillion and $3 trillion, that would include most of the ideas from the grand bargain, with some revenues and some jobs ideas. But the jobs ideas aren’t mandated by the commission, and neither is any ratio of taxes to spending cuts. It just sets up where there’s a proposal given, it includes jobs and cuts and revenue, and everything gets thrown out but the cuts.

The President could of course say that he wouldn’t sign such a package. And he plans, according to these reports, not to negotiate with Republicans but to make the case to the public that they’re blocking progress. Given that the only things that have passed in this Presidency have been the result of intense negotiation, that means these are more political ploys than actual proposals. And again, it would have been nice to see public works ideas when they had a chance to pass.

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David Dayen

David Dayen