A safety net for government jobs?

In Washington this week, President-elect Obama called on Congress to create 3 million jobs over the next two years – “more than 80 percent of them in the private sector.”

Republicans on Capitol Hill did a little quick math: That means 20 percent, or some 600,000 new jobs, will be in the public sector. That would boost the ranks of federal employees by a third, they said, none too pleased about the prospect of a “big government” revival.

“The federal government is bloated, inefficient, and spends too much of your hard-earned money,” said Rep. Steve King (R) of Iowa, in a statement. Some 600,000 new government jobs “will only add to the waste, fraud, and abuse coming out of Washington, D.C., and fail to provide a true economic stimulus.”

But that calculus leaves out a key phrase that Obama transition officials insist is part of the president-elect’s plan: to create “or save” 3 million jobs. “The vast majority of government jobs will be state and local jobs being saved,” said one official, speaking on background.

The debate over whether public- or private-sector jobs deserve a bigger backstop in a troubled economy is reviving one of the most enduring fault lines in American politics.

When President Franklin Roosevelt launched his Works Progress Administration in 1935, conservative critics called it a boondoggle. Many liberals, then and now, saw the program as transforming and as a big boost for the nation. By its demise in 1943, the WPA had employed some 8.5 million people and created roads, schools, bridges, and works of art across America.

But the jobs the Obama team aims to support in the public sector aren’t brand new federal jobs, aides say. They’re mainly existing state and local jobs, threatened by worsening state budget woes.

States are awash in red ink, with only a few exceptions, across the nation.

“Combined budget gaps for the remainder of this fiscal year and state fiscal years 2010 and 2011 are estimated to total more than $350 billion,” according to a Dec. 23 report by the Center on Budget and Policy Priorities.

Because most state governments cannot by law run a deficit, states have already begun drawing down available reserves or rainy day funds. What’s left are spending cuts, including potentially massive layoffs of state and local employees, or tax increases, the report notes. “Budget cuts are often more severe in the second year of a state fiscal crisis, after reserves have been largely depleted and thus are no longer an option for closing deficits.”

“Right now, there’s a grave risk that many, many state and local employees are going to be put out of a job because of budget cuts,” says Henry Aaron, a senior fellow at the Brookings Institution in Washington.

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