Economy Fuels Democratic Rift

The frustration is particularly acute in the House, where Democrats are working to pass a significant package to jolt job growth before heading home for Christmas. Leadership sources said the White House has made clear it would rather kick off legislative action around President Barack Obama’s State of the Union address in a month — a delay dismissed out of hand by Democratic lawmakers facing mounting heat from back home about the 10.2 percent unemployment rate.

The intrabranch tension comes as the administration — already stretched thin by the rollout of its Afghanistan strategy this week and the do-or-die Senate debate over health care reform — turns its attention back to the economy today by hosting an all-day jobs summit. But the session is only fueling anger back on Capitol Hill, where some key Democrats griped they were invited to participate only in a limited capacity and others saying they had been excluded altogether.

Rep. Alcee Hastings (Fla.), co-chairman of the Democratic Congressional Task Force on Job Creation, said it was “inexcusable” that the White House had left Members of Congress out of the event. Likewise, Small Business Chairwoman Nydia Velázquez (D-N.Y.) said she was “surprised to see no Members were invited. When you talk about jobs creation in this country, the largest numbers of jobs created are done by small businesses.”

Hastings indicated the stiff-arm treatment was part of a broader pattern of Democrats at either end of Pennsylvania Avenue working at cross-purposes. “There has not been sufficient coordination, and what winds up happening is we wait until the executive decides what it is they want to do, and if we were to operate on their timetable, then the time would never be right,” he said.

Democrats on both sides of the Capitol said the primary disconnect between the White House and the Congress is when jobs should be created, with the administration focused on getting the economy back on track by the time Obama is up for re-election in 2012 and Congressional Democrats clamoring for proposals that will quickly jump-start hiring before they face voters next fall.

With the heightened urgency on the Hill, lawmakers are moving ahead in defiance of the administration’s preferred timeline. “The reality is, the unemployment rate is up, people are losing their jobs and we need to address the issue today, not two months from now,” Velázquez said.

House Democratic leaders are zeroing in on the mix of items they plan to include in their jobs package. The measure will likely include about $100 billion of emergency spending on extensions of unemployment insurance and COBRA health benefits and food stamp funding. On top of that, the bill will likely tap unspent Troubled Asset Relief Program funds to pay for about $60 billion in new spending on infrastructure projects, small-business tax relief and direct jobs programs, among other possible items, Democratic aides said.

Senate Democrats were loath to publicly criticize the White House but acknowledged that the president has set different goals for a bill and has not been heavily involved in their efforts to date.

“The White House, House and Senate are all working on parallel tracks,” a spokesman for Senate Majority Whip Dick Durbin (D-Ill.) said. “The good news is we all have the same goal: job creation on a large scale. But I do think we differ on how quickly that job creation should occur, but that doesn’t mean we’re not working together. We are.”

Durbin and Senate Democratic Policy Committee Chairman Byron Dorgan (N.D.) have been deputized by Majority Leader Harry Reid (D-Nev.) to devise a jobs bill that could be brought up in early January, depending on the length of the current health care reform debate

Dorgan indicated that the White House has had little input in the Senate’s deliberations.

“We’re keeping them informed of what we’re doing and we’re also interested in what they’re doing, but at the moment we’re trying to put together our own list of changes and policies that we think would create jobs, and then we’ll coordinate with the White House and also the House of Representatives,” Dorgan said Wednesday.

Dorgan said he hopes to begin writing a bill in the next two weeks, and aides indicated a draft bill could be presented to the Democratic Conference before the chamber breaks for Christmas. In the meantime, Durbin and Dorgan have been soliciting ideas from a variety of sources for proposals that would quickly create jobs but have relatively modest price tags.

Two weeks ago, the pair held a special meeting to brainstorm ideas with more than 20 Democratic Senators. On Wednesday, Dorgan held a hearing in the Policy Committee that focused on whether banks receiving federal bailout money have used that infusion of cash to lend to small businesses ready to hire more employees. It is the first in what Dorgan described as a series of jobs-focused hearings the partisan panel will hold.

Durbin met with a group of governors on Wednesday to get their input on how a job package should be structured.

Meanwhile, Republicans were looking once again to tie the health care debate in the Senate to the broader fight over jobs and the economy.

“The first, best thing for the job summit, to create jobs, would be to defeat this health care bill,” Senate Republican Conference Chairman Lamar Alexander (Tenn.) said Wednesday, arguing that legislation will have a crippling effect on job creation.

Arguing that “we’re in a very difficult time in terms of unemployment,” Sen. Johnny Isakson (R-Ga.) noted that an increase in new hires generally lags behind other economic indicators and that pushing through the health care bill could cause more delays.

House Republicans will use Obama’s job summit to promote their own set of solutions to economic problems.

Minority Leader John Boehner (R-Ohio) will host an economic roundtable of his own on Thursday to counter the White House summit.

The event will feature several prominent conservative economists including Larry Lindsey of the Lindsey Group; Doug Holtz-Eakin, a former policy director for Sen. John McCain’s (R-Ariz.) 2008 presidential campaign; the Ethics and Public Policy Center’s Jim Capretta; the Hudson Institute’s Diana Furchtgott-Roth; and the American Enterprise Institute’s Kevin Hassett, Tom Miller and Alex Brill.

“We’ve lost three million jobs over the course of this year, we have a 10.2 percent unemployment rate, and we’ll be talking about how to really help small businesses and American families get the economy moving,” Boehner told reporters Wednesday. “We’ll probably also talk about the job-killing policies that this administration continues to support.”
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