House passes jobs bill: no giant leap against unemployment
Positive signs suggest that the jobs bill passed by the House Thursday could help curb unemployment, economists say. But it is not expected to be a major kick-start to job creation.
The House of Representatives passed a jobs bill Thursday in a move that may give a modest nudge to job creation rather than a giant push.
The bill parallels one that has already passed the Senate. It would put $15 billion toward tax breaks for firms that hire unemployed workers, and toward subsidies for state infrastructure bonds. It also puts $20 billion into highway and transit programs that faced lower-than-expected funding from gasoline-tax revenues.
The measure won't be a fix-all for America's nearly 10 percent unemployment rate, economists say. But the break on payroll taxes for employers – coupled with a $1,000 credit for each new worker who stays on the payroll for a full year – will prod at least some employers to hire workers sooner than they otherwise might, many say. That, along with signs of gradual improvement in the economy, could help the labor market begin to recover.
"This is one of a series of critical measures to get more Americans back to work and strengthen economic growth," Treasury Secretary Tim Geithner said in a statement after the Senate passed its bill last month.
In fact, more jobs-related measures are already in the works. Next up could be an extension of various tax breaks, largely for businesses, and extended benefits for the unemployed.
The House jobs bill passed Thursday in a vote largely along party lines, 217 to 201. The Senate will have to vote anew on its bill, because the House added "pay as you go" budgetary provisions in after the original Senate bill was passed. (For Monitor coverage of the Senate's jobs bill, click here.)
Economists are divided over how strong an impact stimulus measures can have on jobs – especially for an economy that's highly in debt. Consumers and businesses may hold back, figuring that extra government spending now won't be easy to pay for later.
Still, the jobs bill comes at a sensitive time when many forecasters say the economy needs help. A recovery appears to be under way, but if it doesn't gain self-sustaining momentum the nation would lapse back into recession. Then reviving the job market might become even more difficult and costly.
Some signs this week have been positive. Consumer spending edged up in the most recent monthly report from the Commerce Department. And in parallel signs, many retailers reported stronger than expected results. An index of activity in the service sector – where most jobs are – also improved.
Rising spending by consumers and businesses should, over time, provide fuel for job growth. But many economists worry that the process will be slow. With more than 14 million Americans who want work not being able to find it, the jobs bill is a high priority for Congress.
• Material from the Associated Press was used in this report.