The Capital Job

CNN's Jeanne Sahadi takes a thoughtful look at what Congress can do to pass a jobs bill as soon as they can.

Several ideas are percolating among economists and lawmakers. But none are clear winners - politically or economically.

There is a limit to what government can do to create jobs, and there is legitimate disagreement about which measures offer the most bang for the buck.

It's also because a jobs bill that adds to the deficit may face headwinds since the country's debt problem - which both Democrats and Republicans played a heavy hand in creating - has become a political hammer to oppose legislation.

(More after the jump...)

In the meantime, the spectrum of views in the debate over whether and how to stimulate job growth is wide.

There are those who say you can't go big enough.

"If you fail to have a program in place sufficient to the task, you end up constantly behind the curve," said James Galbraith, a professor of government at the University of Texas. Galbraith estimates that the country would need to generate 3 million jobs a year for the next five years to get the employment rate back to where it was a few years ago.

Others say the best approach is "do no harm."

The ideas for stimulating job growth so far are "at best neutral and at worst harmful to the economy," said J.D. Foster, a senior fellow at the conservative Heritage Foundation. "The economy needs a dose of confidence and certainty, not random, half-baked ideas."

Foster said it would be better for the administration to make a clear statement that it will not push for any tax increases until the unemployment rate is at or below 7%, something that isn't likely to happen until after the next presidential election. Beyond that, he'd recommend more tax cuts, but recognizes that would be difficult given the country's record-sized deficits.

Really?  Tax cuts?  That'll help!  Businesses won't use those to line their pockets rather than hire people.  That never happens.
But the real issue is the looming state and local government budget meltdown in 2010.

With jobless rates rising in many states, revenue has fallen, leaving many states with yawning budget deficits.

Mark Zandi, chief economist of Moody's Economy.com, estimates that state and local governments are likely to face a combined shortfall of $150 billion in fiscal year 2011, which begins next summer.

"The hole is turning out to be larger than we thought and deeper," Zandi said at a conference held by the liberal Economic Policy Institute last week.

And it could cause the loss of up to 900,000 jobs in 2010 alone, according to another liberal think tank, the Center on Budget and Policy Priorities.

Almost a million jobs could be lost out of state and local governments alone next year.  Of course, that's fine with Republicans.  Count on them to oppose a jobs bill across the board, and the Dems need to call them on it every news cycle.