The Baucus/Grassley bill was roundly panned by the rest of the Democratic caucus. “It looks more like a tax bill than a jobs bill to me,” said Sen. Sherrod Brown (D-OH). So Majority Leader Harry Reid (D-NV) scrapped it in favor of a $15 billion bill with four pieces: a payroll tax break, and one-year extension of highway funding, an extension of the Build America bond program, and a business tax break for equipment expensing.
Republicans, who were keen on many of the tax provisions in the Baucus/Grassley bill, immediately cried foul, complaining that Reid was undermining economic recovery with his actions. Grassley spokeswoman Jill Kozeny said that Reid “pulled the rug out from work to build broad-based support for tax relief and other efforts to help the private sector recover from the economic crisis.”
But it’s funny that the GOP suddenly feels that the legislation is must-pass to boost an economic recovery considering that earlier in the week they said that it wouldn’t create a single job:
Kyl, a member of Finance, said he most definitely “would not call it a ‘jobs bill’,” though…“No, I dont call that a jobs bill,” Kyl said emphatically…”All of that has to be done, but it does not create one job.”
And even though they readily admitted that the bill was full of stuff “that has to be done,” Republicans were placing all sorts of conditions on their support, including unanimous consent to vote on a huge cut in the estate tax that would give billions in tax breaks to the heirs of wealthy families.
So Reid was wise to pitch the Baucus/Grassley bill overboard and to say that he’d revisit the tax extenders later. Even before it came out, economic analysts and members of the administration were saying that it would “only work on the margins” in terms of boosting employment. The New York Times’ editorial board noted that “it was not even in the same league as the modest House-passed $154 billion jobs bill.” There was no reason to allow the GOP to wring out concessions in order to pass a bill that wouldn’t have done anything.
Which isn’t to say that Reid’s $15 billion effort will do all that much either. With the administration’s Council of Economic Advisers estimating that unemployment is still going to be above eight percent in 2012, a much more concerted effort is necessary, including aid to states and some sort of direct job creation.
Cross-posted on the Wonk Room.