Jobs-bill bandwagon speeds up as economy sputters
American voters and the US economy itself appear to be sending the same clear signal to Washington about jobs:Skip to next paragraph
Subscribe Today to the Monitor
Start a program, and fast, to put at least some of the 13 million unemployed Americans back to work.
Reagan administration officials and the leadership of both parties in Congress are revving up in response to that signal, though they would tackle the problem in different ways.
As for the economy itself, economist Alan Greenspan says ''it is likely to grow less than 2 percent in 1983. Unemployment may be rising until the first quarter of next year.''
A growth rate that weak will not do much to bring the jobless rate down. So pressure for special jobs-creating programs appears likely to grow, not diminish , during the lameduck session of the present Legislature - and even more when the new 98th Congress arrives in town.
Uncertainty over economic trends impelled a leading US bank, Chemical Bank of New York, to boost its prime rate - the interest charged to top corporate borrowers - to 12 percent from 11.5 percent. This reversed a steady downward movement of the prime in recent months.
An unexpected surge in the nation's money supply - pushing all major measurements above limits targeted by the Federal Reserve Board - sent a chill of concern through financial circles.
On the positive side, inflation for the year so far is rising less than half as fast as in 1981, measured both by consumer and producer, or wholesale, prices.
Producer prices, spurred mainly by higher price tags on 1983 model cars, rose a modest 0.5 percent in October, the Labor Department reported. This adds up to a 3.3 percent annual rate of increase for the first 10 months of 1982.
Against this background it appears almost certain that Congress will approve at least one program to put people back to work. As matters now stand, the plan seems likely to include - if not be centered on - an increase in the retail tax on gasoline.
Transportation Secretary Drew Lewis pushes for a 5 cent-a-gallon hike - 4 cents to be devoted to rehabilitating the nation's highways and bridges and 1 cent to improving mass transit.
Several times, most recently during the Carter administration, Congress has turned thumbs down on schemes to boost the retail price of gasoline, whether through a new tax or an import fee on foreign oil.
This time around, however, huge budget deficits have jolted politicians at both ends of Pennsylvania Avenue into realizing that more money must be found to keep the shortfalls from topping $200 billion.
American drivers, it is hoped, will absorb an extra 5 cents a gallon without much complaint, especially if they see it going to fix the country's dilapidated roads and bridges.
Currently the federal tax on gasoline is 4 cents a gallon, plus state taxes averaging 8 or 9 cents a gallon. This amounts to much less than similar taxes paid by drivers in Europe, where taxes often comprise 50 percent or more of the retail pump price.
Mr. Lewis and others cite several advantages of a higher gasoline tax, not the least being that money raised in this way - an estimated $5.5 billion a year - would not add to budget deficits.
Repair of the nation's infrastructure would be hastened and, in the process, an estimated 320,000 jobs would be created.
Because President Reagan insists he is against tax hikes and ''make-work'' jobs programs, White House officials dance a rhetorical tightrope in describing the gas tax plan.
The boost is called a ''user fee,'' not a tax, and the jobs aspect, says Lewis, is secondary to the need to refurbish roads and bridges.
Initial response on the Democratic side is a proposal by Rep. Henry S. Reuss (D) of Wisconsin, chairman of the Joint Economic Committee, for a multibillion-dollar program designed to put up to 600,000 Americans back to work , mainly on bridge and highway repair.
Mr. Reuss's plan would be financed in part, he says, by a cut in defense spending and by denying upper-income Americans a full 10 percent income tax cut next July. Such a program could face a presidential veto.