Crucial Job Creation Legislation Before Congress

May 27, 2010

By Elizabeth Lower-Basch

A critical jobs creation bill has stalled in the House, putting in limbo programs that would aid vulnerable families continuing to struggle due to prolonged effects of the recent recession.  

The U.S. House had scheduled a May 27 vote on the bill, the American Jobs and Closing Tax Loopholes Act of 2010, but it failed to come up for a vote due to congressional wrangling over the bill's provisions.

The Americans Jobs bill funds the TANF Emergency Fund for another year, provides funding for summer jobs for youth, extends unemployment insurance benefits for the long-term unemployed, and temporarily increases the share of Medicaid and child welfare costs paid for by the government. These provisions are critical to ensure the nation's economy fully recovers and  low-income people have the tools they need to participate in a robust recovery.

  • Created by the American Recovery and Reinvestment Act, the Temporary Assistance for Needy Families (TANF) Emergency Fund provided $5 billion for fiscal years 2009 and 2010 to assist states in expanding services during the recession. States that increased spending on assistance, short-term non-recurrent benefits, or subsidized employment last year or during FY 2010 can receive 80 percent reimbursement of the increased costs.  

    The Emergency Fund, however, is scheduled to expire on September 30, 2010. The American Jobs bill would provide $2.5 billion to extend the TANF Emergency Fund for another year. States already have plans to create more than 180,000 jobs - almost all of which are in the private sector -- before the TANF Emergency Fund expires. These jobs would be lost without the Emergency Fund. Extending the TANF Emergency Fund is critical for struggling families as well as for states trying to create jobs for vulnerable populations.
  • Youth -- ages 16 to 19 --  make up nearly a third of people currently unemployed across the country.  According to the Bureau of Labor Statistics (BLS), currently only 25 percent of teens between 16 and 19 are employed, down from 37 percent just five years ago. For black teens, that rate is only 16 percent.  These young people critically need early work experience to develop strong work ethics and appropriate workplace skills, and earn more in later years.  Moreover, disadvantaged teens who work are more likely to remain in high school than their peers who do not work.  

    The American Jobs bill would provide funding to support over 300,000 jobs for youth ages 16 to 21 through summer employment programs. Last summer, the Youth Workforce System under the Workforce Investment Act (WIA), through American Recovery and Reinvestment Act investments, put over 355,000 youth to work.  Funding jobs for youth will help communities build on this success, provide youth with income to help support their families during tough economic times, and fuel demand in local economies through their spending.
  • Although the job market has shown some signs of recovery, unemployment remains at generational highs. Further, long-term unemployment is at record levels, with 45.9 percent of unemployed workers being out of work for six months or more in April 2010. The economy has created jobs for the last three months, but even if the current pace of jobs creation is sustained, recovering the millions of jobs lost throughout 2008 and 2009 will take years.

    The American Jobs bill would allow states to continue current levels of Unemployment Insurance benefits for the long-term unemployed through the end of the year. This extension is crucial so workers can avoid delays in unemployment insurance benefits. This year, Congress has repeatedly passed short-term extensions of unemployment insurance benefits, but votes on these short-term extensions have been frequently postponed, resulting in harmful delays. An extension to the end of the calendar year would protect these crucial benefits from the whims of the political process, ensuring unemployed workers have needed support as they continue to search for jobs.
  • The bill also provides a six-month extension of the Recovery Act increase in the share of Medicaid and child welfare costs paid by the federal government, taking the increase to the end of most states' fiscal years. This extension would provide critical assistance to states facing budget shortfalls, helping avoid major cuts in needed services and layoffs of state and local employees.

The House should swiftly pass  the American Jobs Closing Tax Loopholes and Preventing Outsourcing Act. The temporary spending in the legislation would help stimulate the economy as well as aid Americans who have been hardest hit by the recession. Failing to provide needed funding for these programs would risk crushing the fragile recovery that has begun.

Read CLASP's letter to Speaker Pelosi supporting the bill.



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