On Capitol Hill, Illinois' own U.S. Rep. Phil Hare is championing the Local Jobs For America Act, which could help bring the state's economy back from the brink. We caught up with Hare to discuss the legislation.
You don't have to look beyond Illinois' borders to see how desperate American cities and towns have become for new revenue. School districts across the Prairie State are bracing for 13,000 layoffs next year. Nonprofit agencies tasked with running the state's human service programs are on the brink of financial collapse. And municipal departments are so strapped for cash that services once thought sacrosanct -- police and fire protection, for example -- might not be spared from the budget ax. Despite the array of budget experts who argue that it's crucial we raise new revenue, state lawmakers continue to ignore reality. But in D.C., Illinois' own U.S. Rep. Phil Hare is championing legislation that could help bring the state's economy back from the brink.
Under the Local Jobs for America Act, introduced by House Education and Labor Committee Chairman George Miller (D-CA) this week, the federal government would pump $100 billion directly into states and municipalities over the next two years. The goal would be to avert one million potential layoffs of teachers, police, fire firefighters, and other public employees. Under the bill, $52.5 billion would flow directly to communities whose populations exceed 50,000 residents. Another $22.5 billion would be passed through state legislatures to benefit smaller towns. The remaining $25 billion would be used to plug holes in school district budgets. Furthermore, those citizens who were recently laid-off, on unemployment insurance, or those who have recently exhausted their benefits -- would get first crack at any newly-created jobs.
We caught up with Hare, who sits on the Health and Education Committee, to discuss the legislation. Here's a lightly edited transcript of that conversation:
PI: How would Illinois stand to benefit from the bill?
HARE: I haven't seen the breakdown yet. But a lot of municipalities in my district are facing cutbacks and they say "I just don't know how we're going to maintain services." They just can't take the hit that they're going to under the state budget. At the end of the day, cities just don't have the money. This is an immediate infusion of jobs. It would put people to work in 30 days.
If we're going to do a jobs bill, it has to be bold and it has to be quick. People getting pink slips are hurting. The money in this bill would go directly to communities so mayors, city councils, [and] superintendents would all have direct control over how the money is spent.
PI: Considering how opaque some Illinois governments were about spending their share of stimulus, are you concerned with how the money would be doled out?
HARE: I think our mayors know what's best for our cities. This way, we have a much better accountability mechanism built in.
This would be just like CDBG [ the Community Development Block Grant program]. When a city applies, the money goes directly to the city. We make sure in order to get the money, they report back that these employees were retained.
PI: What sort of impact will the spending have on the overall economy?
Hare: For every one percent of unemployment, it's billions that we lose. Under money [spent on jobs] in the stimulus, we collected $350 million in payroll taxes. If these people hadn't been employed, we'd have written $300 million in unemployment checks. The effect ripples all the way across. At the end of the day, if we're serious about getting the economy back on track, people need to have jobs.
PI: Is $100 billion enough?
HARE: I think it's enough for now. Our priority has to be getting people back to work. We have to declare war on unemployment and we have to put our money where our mouths are.
We gave $750 billion to the banks. And I agree we can't have failing financial institutions. But we also can't afford to have schools failing or our people failing.
Look, either you're on the side of ordinary people or you're not. And this bill is on the side of ordinary people.
PI: What kind of political support does the bill have in the House?
HARE: Municipalities are hemorrhaging jobs. It's time for bold action and I think people want it. I think we're going to get a lot of support across party lines. The [US Conference of Mayors] will be here next week and they're our best lobbyists. They're telling their congressmen, "We expect you to go to bat for us." I think this bill is going to move quickly.
PI: What's your take on the Senate's strategy to break up jobs and economic stimulus bills to get them passed?
HARE: We're in the critical zone for cities and towns across the country. I disagree with a piecemeal approach. This is not how Roosevelt did it during the Depression. He didn't mess around and say, "We can't afford it." The Senate is taking the wrong approach. It will take too long and won't make a difference.
We need to stop nibbling around the edges. Fifteen million people are unemployed. Many for six or more months. The only way you solve the problem is that people pay taxes -- state, city, municipal, and federal.
PI: Any thoughts on Illinois' budget stalemate?
HARE: I don't tell states how to do their jobs. But look, Illinois is $13 billion upside-down. They need to look at cuts -- as long as they don't hurt people. There is no way the legislature is ever going to come close to trimming that kind of money without massive, massive cuts. You have to decide at some point when you stop cutting. Someone's got to stand up and say, "Where do we get the rest of the money?"