New Obama jobs bill: Do too many Democrats view it as 'bailout lite'?

Firefighters, in town to lobby for a $35 billion jobs bill, so jammed a cavernous Senate hearing room that many had to be asked to leave – for exceeding the fire code.

“This is an emergency,” Vice President Joe Biden told cheering public-service workers at the rally, citing at least 300,000 teachers, 10,000 law enforcement officers, and 7,000 firefighters laid off in the past 18 months.

“The police chief of Camden [N.J.] has lost half of his force, and crime has gone through the roof,” he added. “It’s not really the fault of the mayor or the governor. They don’t have the money because of this God-awful mess we got put into.”

With more layoffs for public-service workers pending across the nation, the stakes are high for the bill, but so are the hurdles in the US Senate.

The bill is a smaller version of the $447 billion jobs bill promoted by President Obama but rejected by the Senate Oct. 12. It would provide federal money to help protect public-sector jobs.

But Republicans say the new bill is "bailout lite," paid for by raising taxes – a 0.5 percent tax on incomes over $1 million. That's a nonstarter for most Republicans.

And moderate Democrats, too, are wary of the bill. Sen. Ben Nelson (D) of Nebraska says he won’t back a bill that raises taxes for new spending – even for first responders. “As soon as you start talking about revenues, people stop talking about spending cuts,” he says.

Senator Nelson, up for reelection in 2012, says what he hears most from Nebraskans are concern about federal deficits. “People back home are talking to him about how to bring down the deficit, and this won’t do that,” says spokesman Jake Thompson.

Sen. Jon Tester (D) of Montana, who voted with Nelson to oppose the first Obama jobs bill last week, has yet to commit to backing the latest version of a jobs bill.

“Jon supports full, responsible funding for this nation’s teachers, firefighters, and first responders,” said spokeswoman Andrea Helling in a statement. “But he’s concerned that this specific proposal doesn’t have the sideboards needed to ensure the money actually goes to them.”

Under the bill, funds to the states are likely to be distributed on the basis of competitive grants – a move seen as putting rural states at a disadvantage. “He’s also concerned that rural states like Montana would have to compete on an uneven playing field for this funding,” Ms. Helling added.

"Senate jobs bill has worthy goal, but we must stop spending what we do not have,” tweeted Sen. Joseph Lieberman (I) of Connecticut, during the rally. A former Democrat, Senator Lieberman expressed similar concerns on the floor of the Senate before the vote on the original jobs bill last week, but wound up backing it.

Meanwhile, Senate Republicans are again lining up in solid opposition, both to the idea of a temporary “bailout” of states and to the plan to pay for it with a permanent tax hike on incomes over $1 million.

“What’s going on is that Democrats are obsessed for some reason with raising taxes,” said Senate minority leader Mitch McConnell (R) of Kentucky, in a floor speech on Wednesday. “That’s the only possible way to explain their latest idea to impose a permanent tax hike on about 300,000 US business owners, and then use the money to bail out cities and states that can’t pay their bills.”

“I don’t know if Democrats have noticed, but Washington can’t pay its own bills right now,” he added.

As the jobs debate heats up, Democrats are lining up with public-service workers and Republicans with the private sector.

In a floor speech on Wednesday, Senate majority leader Harry Reid (D) of Nevada said, “It’s very clear that private-sector jobs have been doing just fine. It’s the public-sector jobs where we’ve lost huge numbers, and that’s what this legislation is all about.”

Senate Republicans, appearing tomorrow at a rally with private-sector franchise owners, disputed that analysis.

“It would be difficult to be more wrong,” said an e-mail from the minority staff of the Senate Finance Committee.

Since the beginning of the recession in December 2007, there have been 6,257,000 private sector job losses, a 5.41 percent decline, and 392,000 federal, state, and local government job losses, a 1.75 percent decline, the staff report concluded, citing Bureau of Labor Statistics data.

Former Sen. George LeMieux, who is challenging Sen. Bill Nelson (D) of Florida in 2012, called on Senator Nelson to “denounce Harry Reid’s confused economic policies and stand up for the true job creators in this country.”

Senator Reid told public-service workers at Wednesday's rally that he planned to take the new jobs bill to the floor by Friday.

"With 14 million people out of work ... we want to make sure there's a vote on this bill this week," he said.

The majority leader plans to introduce three more bills carved out of the initial Obama jobs plan. Even if they all fail, they set up issues for the 2012 race, where Senate Democrats are defending 23 seats.