Members of Congress and local officials yesterday pushed for passage of pending legislation that would create jobs at the county and city level, in an effort to avoid losses of up to 500,000 government jobs over the next year and a half.
They pleaded their case at a press conference held here by the National League of Cities, the U.S. Conference of Mayors, and the National Association of Counties.
The legislation, the Local Jobs for America Act, has stalled in the House and Senate, but lawmakers hope to revive interest in it despite an anti-deficit spending sentiment in Washington.
The bill would provide $75 billion in temporary fiscal assistance over two years to local governments and organizations to save and create jobs.
A report released by the three groups estimated that municipal job losses will approach 500,000 by the end of the next fiscal year as local governments cut spending to balance their budgets.
Local government employment has fallen for five consecutive months through June, according to the Labor Department’s Bureau of Labor Statistics.
The report surveyed city and county officials in May and June about their government employment conditions.
The respondents said they have cut 8.6% of their full-time equivalent positions. Nationally, that translates into 481,000 jobs.
During the press briefing, local government officials discussed the balancing act they face to preserve their credit ratings while keeping workers employed.
“It is a daily challenge to try to maintain a high credit rating, access to the [bond] markets, but also make sure we can pay our public employees,” Philadelphia Mayor Michael Nutter, a Democrat, told reporters.
Asked about his initiation of talks with the Treasury last year about a direct line of credit, Nutter said he is still waiting to hear from the department.
He said the city could cut its borrowing rates in half if it borrowed at the 30-year Treasury rate plus 50 basis points. The savings would generate $32 million a year for the city, Nutter said.
“We are a great credit risk because we cannot go out of business,” Nutter said. Philadelphia last week sold $285 million of tax and revenue anticipation notes.
Local officials also touted the success of the Build America Bond program, though some were skeptical about whether it can be extended by the end of the year, given the contentious pre-election political climate.
Ilene Lieberman, a Broward County, Fla., commissioner and the president of the Florida Association of Counties, said the county’s savings from BABs have been “astonishing.”
Last month, Broward County sold $118.7 million of BABs, including some maturing in 2040, at 250 basis points over a 30-year Treasury bond.
BABs are responsible for putting people to work because of the savings the new securities have provided for municipalities, she said.
The direct aid to local governments via the jobs legislation is necessary to keep people employed and paying their taxes, the local officials said.
Lieberman said that because of furlough days for public employees in Broward, the workers will actually be paying less in taxes than they did last year.
Among the House lawmakers at the press conference, Rep. Keith Ellison, D-Minn., criticized opponents of the legislation who are worried that continued federal stimulus will increase the national deficit.
The deficit argument cannot be used “as a weapon against the unemployed,” he said. Last week, President Obama signed legislation extending unemployment benefits.
The bill had been delayed as lawmakers debate the consequences of the federal spending on the national debt.
The House members also criticized the Senate for not pushing the jobs legislation.
“We can’t get the Senate to move on this,” said Rep. Barbara Lee, D-Calif.
The lawmakers said that if the tax cuts established in President George W. Bush’s administration for those in the top two federal income tax brackets are allowed to expire, the resulting revenue gains would help pay for the jobs bill.