Christina Romer, leaving her position as the head of the White House’s Council of Economic Advisers this week, gave a flash response to the jobs report released this morning, which showed a slight rise in the unemployment rate. She focused, as the administration has focused for months, on private-sector jobs creation, which remains existent if too slow to bring down the unemployment rate. She notes that the Bureau of Labor Statistics improved reports for June and July, and that more than half a million people rejoined the labor force. The number of long-term unemployed also declined — though it is not clear whether they did so because they found jobs, or because they stopped looking for jobs. Additionally, she stressed that the jobs report indicates that the economy seems to be improving slowly, rather than deteriorating. Had the unemployment rate tracked up to 9.8 percent, or had private employers shed workers rather than adding them, fears of a double-dip would not been unwarranted. Here is the full text of her analysis: Today’s employment report was better than expected. Private sector payrolls increased by 67,000 in August — the eighth consecutive month of private sector job growth. This growth is consistent with other recent data reports indicating that the economy is continuing to recover, albeit at a somewhat slower pace than in the early spring. The rate of job growth, however, is not as large as needed to bring the unemployment rate down quickly. Indeed, the unemployment rate rose one-tenth of a percentage point to 9.6 percent, as more than half a million people joined the labor force. The President continues to work with his economic team and with Congress to identify measures that could help speed the recovery and put the economy on a path of steadily declining unemployment. In addition to the rise in August, the estimates of private sector job growth for June and July were revised up by a total of 66,000. Since last December, private sector employment has risen by 763,000. Despite the rise in private sector employment, overall payroll employment fell by 54,000, as 114,000 temporary Census jobs were eliminated. Private sector payrolls expanded in a number of sectors, including education and health services, construction, and temporary help services. Manufacturing employment fell 27,000 in August; much of this drop likely reflects the fact that manufacturing employment in July was elevated because General Motors chose to forgo its usual two-week shutdown. The manufacturing ISM Report on Business released on Wednesday indicated stronger employment growth in manufacturing in August than in July. State and local government payrolls declined by 10,000 in August, consistent with continuing budget difficulties in many states and localities. In the household survey, the number of people employed rose by 290,000. But, because the labor force rose by 550,000, the unemployment rate ticked up to 9.6 percent (from 9.5 percent in July). The employment-to-population ratio also rose one-tenth of a percentage point (to 58.5 percent), indicating that in the household survey employment growth more than kept up with population growth. In addition, the number of workers who have been unemployed 27 weeks or longer declined sharply, from 6.57 million to 6.25 million. Against the backdrop of some unsettling economic data in the past few weeks, today’s numbers are reassuring that growth and recovery are continuing. At the same time, the fact that the growth of private sector payrolls is below the level needed to keep up with normal growth of the labor force is obviously unacceptable. There are a number of step we could take to help increase private sector job growth and put the economy on a path of steadily declining unemployment. We will be working with Congress on these measures in the coming weeks. There will likely be bumps in the road ahead. The monthly employment and unemployment numbers are volatile and subject to substantial revision. Therefore, it is important not to read too much into any one monthly report, positive or negative. It is essential that we continue our efforts to move in the right direction and encourage robust job gains.

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The White House on the Jobs Report

People in line for a job fair in Ft. Lauderdale, Fla. (Michael Francis McElroy/ZUMA Press) This morning, the Department of Labor announced that the unemployment rate climbed from 9.5 percent in July to 9.6 percent in August, as economy-wide lack of demand kept businesses from hiring new workers. Some economists expected a worse report, and the August data offers more evidence of a stall-out in the recovery. Image by: Matt Mahurin Share The report indicated that total employment declined by 54,000, with 121,000 jobs lost from the public sector and 67,000 jobs gained in the private sector. The federal government shed workers as the census finished up. The number of long-term unemployed — workers out of a job for more than six months — declined from 6.6 million to 6.2 million. The long-term unemployed make up 42 percent of unemployed persons, down from 44.9 percent in July. Economists feared a worse report — with private-sector job growth beating forecasts by 20 to 50 percent. For the first time since 2007, the unemployment rate improved year-on-year. But the rising unemployment rate remains evidence of a lagging recovery. Stimulus funds are drying up. Joblessness is pervasive, meaning lower sales for companies. Business owners are concerned about economic conditions, and therefore are loath to hire new workers. Since December, 2009, the private sector has added 763,000 jobs — 95,375 a month — but to keep up with population growth, the United States needs to add about 125,000 positions per month. To return to full employment in five years , the economy needs to add 300,000 a month, every month. The United States has added just 3.4 million net new jobs since January 2000, though the country has grown by 29 million people. In the past few months, the White House has focused on private-sector job creation as evidence of “recovery summer,” though the unemployment rate remains stubbornly high. Some economists inside and out of the administration have declared the jobs trend evidence of the need for new government stimulus to make up for a lack of private demand. Leaving her post as the head of the White House’s Council of Economic Advisers this week, Christina Romer declared the turnaround “insufficient.” The economy “is growing, but not fast enough to create the hundreds of thousands of jobs each month needed to return employment to its pre-crisis level.” “The only surefire ways for policymakers to substantially increase aggregate demand in the short run are for the government to spend more and tax less,” Romer argued. “In my view, we should be moving forward on both fronts.” The White House is reportedly considering new measures to help gin up new jobs in advance of the November elections. But it will likely focus on less-stimulative tax cuts, rather than more-stimulative spending measures. (The most effective forms of stimulus are food stamps and unemployment benefits, which go directly to the neediest citizens and are spent almost entirely, immediately.) Senate Republicans and Sen. Ben Nelson (D-Neb.) have indicated they will support no additional stimulus funds. However, Republicans have said they support tax breaks, and even might not require spending offsets. Recently, Republicans such as Sens. Jon Kyl (Texas) and Mitch McConnell (R-Ky.), the minority leader, have argued that spending increases, but not tax cuts, need to be offset with spending cuts. The administration is reportedly considering pushing for a payroll tax holiday. The tax cut would be temporary, to encourage businesses to hire quickly to take advantage. The Congressional Budget Office this winter found payroll tax holidays to be among the more effective tax cuts in creating jobs and aiding the economy. According to the CBO, a payroll tax cut is about 25 to 33 percent more stimulative than providing a refundable tax credit for lower- and middle-income households, for instance. And the economy is in need of more aid to help restart the recovery, with the jobs report containing broad evidence of a stall out. The number of unemployed persons — workers without a job, but actively seeking a new one — increased from 14.6 million to 14.9 million. The number of workers employed part-time who want to work full time increased by more than 330,000 over the course of the month. The sustained, high rate of joblessness is also suppressing wages for working Americans. Most of the job growth since the recession ended has come not from middle-class or well-salaried positions, but in jobs like home health aide that often come with about $9 an hour and no benefits. “[T]he damaging effects of high unemployment are not just felt by the workers (and the families of workers) who have lost jobs,” Lawrence Mishel and Heidi Shierholz of the Economic Policy Institute wrote this week. “Workers who have kept their jobs or found new work during this downturn have also suffered from a broad-based collapse of wage growth over the last two years. And with unemployment expected to remain elevated for many years to come, we do not expect the suppression of wage growth to ease anytime soon.”

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Unemployment Rate Rises to 9.6 Percent

This morning, ADP, a payroll processing firm, put out its latest employment report . It isn’t good. Between July and August, private employers shed an estimated 10,000 workers; economists expected an increase of about 20,000 jobs. Moreover, ADP revised down July’s increase from 42,000 jobs to 37,000. Over the past six months, private employers have added 37,000 jobs per month, according to ADP’s estimates. To put that in context, the economy needs to add 100,000 to 150,000 jobs a month just to keep up with the country’s growing population, and there are currently 14.5 million unemployed persons looking for work. On top of all that, ADP notes that it expects the government’s official employment report, due on Friday, to be worse. “[T]oday’s [ADP] figure does not include the effects of federal hiring — and now firing — for the 2010 Census,” the company notes. “Hiring for the census peaked in May. For this reason, Friday’s figure for the change in nonfarm total employment reported by the [Bureau of Labor Statistics] might be weaker than today’s estimate for nonfarm private employment in the ADP National Employment Report.” That means that both private and public employment might decline — meaning, unless the labor force shrinks dramatically, the unemployment rate will rise.

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An Ominous Private Jobs Report

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Via TPMDC, Senate Majority Leader Harry Reid (D-Nev.) is up with a new advertisement showing his Republican challenger Sharron Angle bashing the unemployed, calling them “spoiled,” for instance. An unemployed Nevadan then criticizes Angle for the remarks. Angle has previously suggested that the government cut unemployment insurance benefits to get people back to work. And this week, a tape of Angle stating that she would have voted against the Hurricane Katrina relief bill, passed just after the hurricane devastated New Orleans, emerged . Reid and Angle remain close in some polls, but in others, the incumbent is pulling ahead.

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Reid Ad Shows Angle Bashing the Unemployed

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FRP Advisory Reviews HMRC’s Time to Pay Scheme

Nevada wins again. Today, the Labor Department reported that Nevada has the highest unemployment rate of any state or Washington, D.C., at 14.3 percent. That is the highest rate on record for Nevada. Other states rounding out the top five are Michigan (13.1 percent), California (12.3), Rhode Island (11.9) and Florida (11.5). All in all, 11 states have unemployment rates higher than 10 percent — down from 17 last month. Just three have unemployment rates lower than five percent — South Dakota, North Dakota and Nebraska. The unemployment rate declined in 18 states plus the District of Columbia, rose in 14 and did not change in 18. That is not much of an improvement: In June, the unemployment rate fell in more than half of states and increased in five.

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Nevada Remains State with Highest Unemployment Rate

Initial claims for unemployment insurance climbed to a nine-month high last week, the Department of Labor said today. Economists had expected claims to drop from 488,000 the prior week to 476,000. Instead, they reached the highest level since November: 500,000. It is not good to read too much into any one weekly report — the numbers tend to jump around a lot. Still, this seems terrible. The four-week moving average is increasing, and now sits at 482,500, up from 474,500 last week. Claims have ticked up every week for the past month. At one point, it looked like the drop in unemployment claims could stall out, with the number of claim remaining at a high level of about 450,000, as they have since January. But now there is at least a slight bump in claims. Claims need to fall into the 300,000 range to drag down the unemployment rate, currently 9.5 percent. The uptick implies a better chance that the unemployment rate will climb through the fall, as some economists expect.

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Initial Jobless Claims at a Nine-Month High

www.youtube.com/watch?v=2gIzJAOZi70 For more click the link: http://www.jbs.org/component/jomcomment/trackback/6441/com_content

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Beck Uses Quigley Quote About Political Parties

Billions of dollars of stimulus funds created in the $787 billion American Recovery and Reinvestment Act remain in state coffers, Alec MacGillis reports at The Washington Post. On the downside, that means funds have not yet boosted the economy; on the upside, the funds remain to help boost the economy. Administration officials say the stimulus remains on schedule, with 70 percent expected to be spent by Sept. 30. And some economists note that the sluggish economy will still need a boost until 2012, the deadline for spending most stimulus cash. “Some stuff is taking a longer time to have an impact, but we still have over 9 percent unemployment,” said John Irons of the Economic Policy Institute. “The fact that we still have dollars coming on line now should not be seen as a negative.” Many of the unspent funds lie in programs portrayed from the outset as true long-term investments, such as $8 billion for high-speed rail, $17 billion for health information technology and $10 billion for the National Institutes of Health. But other programs that had been viewed as quicker job-generators are also taking a while to get rolling. One positive note: Much of the money is tied up in programs to help green cities and build infrastructure — highly labor-intensive, and therefore job-creating, tasks.

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Stimulus Funds Yet to Be Spent

The unemployed rallied on Wall Street, in lower Manhattan. (Creative Commons) After 99 weeks, or more, of unemployment, traveling to a political rally is a luxury. Across the country, thousands of 99ers, Americans who have exhausted the maximum weeks of unemployment benefits, have written letters or called Congress advocating for legislation extending benefits or creating jobs programs. But the first 99ers rally, held on Wall Street this Thursday, proved a more modest affair. Image by: Matt Mahurin Share Normally, the unemployed suffer from political disenfranchisement, on top of the hardships of joblessness, including loss of income, poorer health outcomes and eroding skills. But a group of activists working online have founded list-servs and websites to connect hundreds of thousands of unemployed workers. And they have teamed up with major labor unions, like the AFL-CIO and the SEIU, to flex their political might. Up until now, their efforts have been virtual; at Thursday’s rally, the unemployed took to the streets for the first time. The rally came at a good time politically. Despite the very long odds of passage, Senate and House Democrats have originated two bills to aid the 99ers in the past 10 days. Sen. Debbie Stabenow (Mich.) introduced a bill moving the maximum number of weeks of federal and state benefits to 119 last week. And this week, Rep. Jim McDermott (Wash.) and Shelley Berkley (Nv.) introduced similar legislation in the House. But just two dozen or so 99ers and a few dozen more unemployed persons met on the steps of Federal Hall, across from the New York Stock Exchange. (Most of the 99ers or figures in the unemployment netroots I spoke with before the event said that they could not afford the gas or plane ticket to get to the rally.) Members of the Transport Workers Union of America Local 100 and the United Federation of Teachers joined them. A few hiccups marred the event. The weather hardly cooperated, with spitting rain and punishing heat and humidity. Additionally, the organizers failed to register for a sound permit, so the New York City Policy officers keeping the peace ordered activists to put away the megaphone about 10 minutes into the event. Organized by the fledgling Unemployed Workers Action Group, the rally called for an expansion of unemployment insurance and jobs programs for the long-term unemployed. There are an estimated 1.5 million 99ers across the country, and their plight results from a recession with not just an unusually high unemployment rate, but an unusually long average duration of unemployment. Indeed, a typical jobless worker — of whom there are 14.6 million — has been out of work for more than 34 weeks, about 8 months, a length unprecedented since the Great Depression. Despite its small size, the 99ers’ rally accomplished an important goal: It got the attention of the press, and advocates for the 99ers see the press as the key to creating pressure for legislation. “Two months ago, nobody knew who the 99ers were,” LaDona King, a 99er and major figure in the 99er netroots told me. “Everybody thought it was some city’s AAA baseball team.” But with growing awareness, they hope, will come political action. To that end, a volunteer at the rally took journalists’ names and numbers, and ensured that any reporter wanting access to a 99er for her story got easy access to several. Late in the event, Ed Schultz — the MSNBC and radio host who has devoted countless programming minutes to the 99ers, and for that reason holds nearly beatific standing among them — stood in a pair of khaki shorts at the back, conducting interviews and shaking hands. (He planned to address the crowd, but could not because of the noise permit issue.) And with the press there, the 99ers at the rally got their chance to speak, and tell their stories. Betty S. Cohen, of Brooklyn, worked as an administrative assistant at an investment bank — not a commercial bank, she notes — for two years before she was laid off in July 2008. “My skills are excellent,” she sighs, “but I can’t get a job anywhere.” She has applied to hundreds of positions via Monster.com and other online search engines, as well as contacting former employers and friends for leads. “I have gotten five calls, and no offers.” she says. “They don’t tell you why.” She has long since exhausted any savings, does not have any living family and is increasingly late on her rent and bills, though she says she was recently approved for Supplemental Nutrition Assistance Program, or SNAP, benefits. “A friend loaned me $20,” she says. “And I told her I didn’t know when I would pay it back. I offered to pay her back in food. I can buy that now, at least.” Marion Glandorf formerly worked for Grenadier Realty Corp. on Roosevelt Island as an executive assistant. She managed contractor relationships for 1,100 apartments, assessed tenant needs and answered scores of calls per day. She came to the rally — she notes she is not a 99er, not yet — wearing a giant sign with her resume on it around her neck. Joining her was Bob Kohler of Suffolk County, New York. He had worked as an IT project manager before the recession, and has focused on writing motivational works about the power of positive thinking and the need to accept hardship. (He said the angry tone of the rally, with speakers shouting at the nearby investment banks, would prove counterproductive.) Kohler did not realize his unemployment insurance would run out shortly after Christmas. It just stopped. “It happened abruptly,” he said, and his wife and he had not adequately prepared. “The American dream?” he says, softly. “It’s decimated.” The rally attempted to capture that sense of decimation, with speakers sharing their stories of hardship — the loss of homes, the loss of respect, the trouble with health, the depression — on the Federal Hall steps, facing the New York Stock Exchange. Some rallied against the banks nearby, but most focused on the need for congressional jobs bills and a Tier V. Dozens of tourists stopped to listen and to clap in support among the protesters and the camera crews. So did a few investment bankers. “Get a fucking job” shouted one young man dressed, stereotypically, in a dark suit, red tie and loafers, his hair sharply parted. He was booed.

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99ers Rally For Unemployment Extension

Yesterday, Sen. Debbie Stabenow (D-Mich.) introduced a bill to provide extra weeks of federally paid-for unemployment insurance benefits for the 99ers — the pool of 1.4 million Americans workers who have exhausted their maximum weeks of federal and state benefits. The Americans Want to Work Act brings the maximum number of weeks to 119 in states with unemployment rates above 7.5 percent, meaning 34 states and the District of Columbia would currently qualify. (As of now, the states with unemployment rates over 8 percent qualify for the federal extension.) It also bolsters a tax credit for companies that hire workers who have been unemployed for more than two months. Democratic Sens. Sherrod Brown (Ohio), Bob Casey (Pa.), Chris Dodd (Conn.), Dick Durbin (Ill.), Carl Levin (Mich.), Jack Reed (R.I.), Harry Reid (Nev.), Chuck Schumer (N.Y.) and Sheldon Whitehouse (R.I.) are cosponsors. “Across our state, more than 35,000 people who have lost their jobs have also exhausted their unemployment insurance benefits. I know that these men and women want to work and have been trying their best to find jobs in this difficult economy,” Stabenow said in a statement. “My legislation cuts taxes for businesses that hire new workers who have been looking for work the longest. My bill also provides 20 more weeks of unemployment insurance to people in states like ours with the highest number of people out of work.” The Tier V bill will prove popular among many, particularly the 99ers and the unemployed. But it will face a real uphill battle in the Senate. First, it needs the approval of the Senate Finance Committee, headed by Sen. Max Baucus (D-Mont.). He has previously voiced opposition to Tier V. “You can’t go on forever,” he told Bloomberg News in April. “I think 99 weeks is sufficient.” If the bill makes it out of committee, a process that can take weeks, it will need to get through a Senate allergic to deficit spending and increasingly recalcitrant on expanding programs for the jobless. Virtually all Republicans as well as Sen. Ben Nelson (D-Neb.) have indicated they will not vote for any expansion that increases the deficit. The full text of Stabenow’s bill has not yet been released, nor has the Congressional Budget Office scored it. But Stabenow’s release did not indicate the bill is offset, and cuts are increasingly hard to find. (This week, the Senate trimmed a food stamp extension to pay for a state-aid bill to keep up Medicaid funding and to save teachers’ jobs.) Previously, Senate aides have told me that while numerous Senate Democrats support the fifth tier and other programs for the long-term unemployed, they hesitated to bring forward a bill they felt would never pass. The House, rather than expanding weeks of benefits, is looking at measures like expanding the TANF Emergency Contingency Fund. “That was put in place after the recession hit to help states, basically to aid them in subsidizing jobs,” Ed Shelleby, spokesperson for Rep. Jim McDermott, told me . “It has hugely bipartisan support.” Nevertheless, many labor economists feel the government needs to be doing more to help the jobless — and many legislators and Americans agree. Unemployment is worse now than it has been since the Great Depression. And the problem is not the height of the unemployment rate, but the duration of joblessness. Never before have unemployed workers been out of a job for so many weeks — a sign of fierce competition in the labor market, and the slowdown in the recovery. The unemployed, already organized online, have recently joined with labor unions and other groups to lobby the Senate for increased benefits.

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Unemployment Extension Bill for 99ers Would Add Fifth Tier of Benefits

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This morning, the Department of Labor said that initial jobless claims edged up last week, from 460,000 to 479,000. Economists expected the number of claims to decrease. The weekly figure is the highest since April. Economists believe it needs to fall into the 300,000s to bring down the overall unemployment rate. The 4-week moving average rose to 458,500. The number of new jobless claims has not fallen since the beginning of the year, indicating a stall-out in the recovery and implying a steady, high unemployment rate.

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Initial Jobless Claims Highest Since April

Last week, I wrote a story on nascent movements to organize the unemployed, a group already connected via enormous online networks and politically fired-up after the eight-month battle in Congress over federally extended unemployment insurance benefits. For those labor groups and online organizations helping the unemployed flex their political muscle in the November elections, it looks like a focus on voter turnover might do the most good. Essentially, the unemployed form an enormous political constituency — more than 30 million Americans have been out of a job at some point during the recession — but they have tended to be disenfranchised. Labor groups and grassroots movements hoping to change that — pressing the unemployed to do everything from calling Senate offices to showing up at Republican town halls to voting. Generally, the unemployed do not have high turnout rates. Dylan Matthews brings the data , showing that 65.9 percent of registered workers with jobs vote, compared with 54.7 percent of the unemployed. On top of that, workers with jobs are much more likely to be registered to vote, compared with the unemployed. (All in all, the higher your income, the more likely you are to head to the polls. More than one unemployed person I’ve spoken or emailed with has said they would canvass and vote if they could afford the gas for their cars.) But labor groups like Working America, local political groups and the unemployed netroots are working to register the unemployed to vote and to offer rides, childcare and eldercare for jobless workers to get them voting. Of course, these sort of get-out-the-vote efforts are commonplace. They are also very effective.

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More on Organizing the Unemployed

Appearing on Meet the Press this weekend, Alan Greenspan, the former head of the Federal Reserve, sounded an awful lot like John Edwards for a central banker with a strong libertarian streak: Our problem, basically, is that we have a very distorted economy in the sense that there has been a significant recovery in a limited area of the economy amongst high-income individuals who have just had $800 billion added to their 401(k)s and are spending it and are carrying what consumption there is. Large banks, who are doing much better, and large corporations, whom you point out and the — and everyone’s pointing out, are in excellent shape. The rest of the economy, small business, small banks, and a very significant amount of the labor force, which is in tragic unemployment, long-term unemployment, that is pulling the economy apart. The average of those two is what we are looking at, but they are fundamentally two separate types of economy. Greenspan also argued for extending the Bush tax cuts for the highest-income families as well as the middle class, noting that the rich are the only ones spending, so best not to discourage them from doing so. That said, Greenspan said that eventually the Bush tax cuts should sunset. “I’m very much in favor of tax cuts, but not with borrowed money.” he argued. “And the problem that we’ve gotten into in recent years is spending programs with borrowed money, tax cuts with borrowed money, and at the end of the day, that proves disastrous.” Additionally, he said he believed that very high unemployment will stick around for a long time. “I would say that there’s nothing out there that I can see which will alter the trend or the level of unemployment in this context,” he noted.

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Greenspan on the Two Americas

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Ben Franklin to Invest $304.100 in Regional Economic Development

This morning, the Commerce Department said that the U.S. economy expanded at a 2.4 percent annual rate in the second quarter — about what economists expected. That rate is down from a 3.7 percent annual rate in the first quarter Nonresidential fixed investment drove growth, increasing at a 17 percent annual pace, up from a 7.8 percent annual pace in the first quarter. Businesses increased their purchases of equipment and software spending by 21.9 percent. Consumer spending, which makes up about 60 percent of the economy, grew at only a 1.6 percent annual pace — worryingly slow. That is a sign that unemployment, underemployment and concern about the weak recovery are keeping consumers from opening their wallets; it is also a cause and an effect of the lagging recovery.

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GDP Growth Slows in 2nd Quarter

Today, RealtyTrac reported that foreclosure notices increased in three out of four metro areas — cities with more than 200,000 residents — in the first six months of the year, compared with the first six months of 2009. The cities and states with the biggest bubbles and biggest collapses remained the worst-hit, with the most foreclosure notices going to metro areas in Florida, California, Nevada and Arizona. All in all, 1.6 million properties received some form of foreclosure notice between January and June. Nevertheless, the report shows that foreclosures seem to have peaked and stabilized, at least for now. The number of foreclosure notices dropped between the last half of 2009 and the first half of 2010. And foreclosure filings have declined in recent months as well. Still, RealtyTrac warned about continued, severe problems in housing. “The midyear numbers put us on pace to exceed 3 million properties with foreclosure filings by the end of the year, and more than 1 million bank repossessions,” James Saccacio, the head of RealtyTrac, said in a release. “The roller coaster pattern of foreclosure activity over the past 12 months demonstrates that while the foreclosure problem is being managed on the surface, a massive number of distressed properties and underwater loans continues to sit just below the surface, threatening the fragile stability of the housing market.” Notably, foreclosure tracks closely with unemployment, and the two feed into one another. Regions with higher rates of joblessness have more families that cannot afford their mortgages. Regions with more homes in foreclosure have more families that cannot move to find work.

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Foreclosures Increase in Most Metro Areas

Last night, TWI’s Annie Lowrey talked to Chris Hayes, guest host of MSNBC’s The Rachel Maddow Show, about the burgeoning political consciousness of unemployed Americans — what she’s termed the “unemployed netroots.” Lowrey wrote about this phenomenon yesterday at TWI . According to her reporting, untold numbers of unemployed Americans are beginning to organize through “a system of highly trafficked, influential blogs and sites connecting the jobless and updating them, often in minute detail, about the ins and outs of Congress’ work on unemployment issues.” “When legislators go home for the August recess, unemployed people are going to go to their rallies and ask them questions about [these issues] — and they’re doing it with union backing,” Lowrey told Hayes last night. Watch the whole video here: Visit msnbc.com for breaking news , world news , and news about the economy

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Lowrey Discusses Unemployed Netroots on MSNBC

In a new paper released today , entitled “How the Great Recession Was Brought to an End,” prominent economists Alan Blinder and Mark Zandi say that the stimulus, stress tests, emergency Federal Reserve maneuvers and Troubled Asset Relief Program saved the economy from collapse. Without those extraordinary measures, they say, the United States’ GDP would be 6.5 percent lower, the unemployment rate would be 3 percentage points higher, there would be 8.5 million fewer jobs and the economy would be experiencing deflation. Blinder is a professor at Princeton and a former Fed official. Zandi is the chief economist at Moody’s Analytics and a former adviser to Sen. John McCain’s (R-Ariz.) presidential campaign. The economists also note that the stimulus — the $787 billion American Reinvestment and Recovery Act — had less impact and proved less important than the government’s monetary policy and financial-market stabilization measures, like the Fed buy-up of mortgage-backed securities. Zandi and Blinder write: It is understandable that the still-fragile economy and the massive budget deficits have fueled criticism of the government’s response. No one can know for sure what the world would look like today if policymakers had not acted as they did — our estimates are just that, estimates. It is also not difficult to find fault with isolated aspects of the policy response. While all of these questions deserve careful consideration, it is clear that laissez faire was not an option; policymakers had to act. Not responding would have left both the economy and the government’s fiscal situation in far graver condition. We conclude that [Federal Reserve Chairman] Ben Bernanke was probably right when he said that “We came very close in October [2008] to Depression 2.0.”

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Zandi, Blinder: Government Saved the Economy

Bruce Bartlett writes that there is little the Fed or the Treasury can do to winnow down unemployment in the face of congressional intransigence on additional stimulus: [T]hose who advocate a monetary helicopter-drop of money to stimulate growth concede that the Fed doesn’t have the capacity to do it without some action by Treasury to distribute the funds, which would be fiscal in nature. It would also require congressional action that is very unlikely in the current political environment. That basically leaves two things that the Fed can do: buy longer term securities and buy very unconventional assets such foreign currency denominated bonds. The first it has already done some of without doing much to get money circulating. The second would put the Fed at war with the Treasury, which jealously guards its dominion over exchange rate policy. Matt Yglesias counters that this is wrong: [Treasury Secretary] Timothy Geithner has already received appropriations to buy printer paper and toner cartridges for the Treasury Department. If [Federal Reserve Chairman] Ben Bernanke is inclined to play along, there’s no bar stopping Geithner from literally firing up his word processor program and printing out pieces of paper that say “Take this to Ben Bernanke and he’ll give you $10,000.” But the larger point I would make is that focusing on the precise microdynamics of Fed action is a mistake. What’s more important is how the Fed frames what it’s doing. If the Fed says it’s determined to push the price level up, and will keep trying things until it gets up to such-and-such a point then that will probably work. The latter point, I think, is the right context in which to view Bernanke’s testimony to Congress from last week. Bernanke might think the economy needs more stimulus, and almost certainly thinks the best way for that to happen is for Congress to authorize additional stimulus spending — jobs programs, public works projects, additional Supplemental Nutrition Assistance Program funding, state aid, expanding the unemployment insurance system, what have you — since interest rates have nowhere to fall. He could have attempted to convince Congress to do that. He could have warned about the peril of rising unemployment leading to a double dip. He could have said, “Absent additional congressional action, the Federal Reserve, in accordance with its mandate to encourage full employment, will attempt to push up price levels using x and y methods.” Instead, he opened his remarks stating, “The economic expansion that began in the middle of last year is proceeding at a moderate pace, supported by stimulative monetary and fiscal policies. Although fiscal policy and inventory restocking will likely be providing less impetus to the recovery than they have in recent quarters, rising demand from households and businesses should help sustain growth.” Again, convincing Congress to do something and publicly contradicting any rosy reports out of Treasury would be the obvious first way to go. This implies to me that, rightly or wrongly, Bernanke does not think the economy needs more stimulus.

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The Fed’s Inaction on Economic Stimulus

This morning, the Labor Department announced that the number of people making initial jobless claims increased sharply last week, up by 37,000 to 464,000. The sustained, high number of initial claims feeds the sustained, high jobless rate. Economists say initial claims need to fall into the 300,000s to demonstrate job growth and to spark a drop in the overall unemployment rate. Claims have remained around 450,000 since the beginning of the year. Last week, claims had dropped to their lowest level in nearly two years. But the Labor Department says last week’s drop was a blip, noting that weekly jobless claims tend to be a jumpy measure. Big manufacturers like General Motors made fewer temporary layoffs than usual, due to higher demand and the already reduced size of their workforce.

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New Jobless Claims Bounce Back Up

Sen. Harry Reid (D-Nev.) just indicated that the Senate might take up the unemployment benefits extension on Tuesday. The federally extended benefits, covered in detail here , lapsed at the end of May — leaving approximately 300,000 families per week, living in states with unemployment rates over 8 percent, without checks. The bill will retroactively approve benefits, and re-up funds until the end of November.

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For 2.1 Million Unemployed, Benefits Extension Will Have to Wait Until Tuesday

The headline on a top story in The New York Times today reads : “Wall Street Hiring in Anticipation of an Economic Recovery.” And here are the summary paragraphs: The shift [towards hiring] underscores the remarkable recovery of the biggest banks and brokerage firms since Washington rescued them in the fall of 2008, and follows the huge rebound in profits for members of the New York Stock Exchange, which totaled $61.4 billion in 2009, the most ever. Since employment bottomed out in February, New York securities firms have added nearly 2,000 jobs, a trend that is also playing out nationwide at financial companies, commodity contract traders and investment firms. Though the figures are small in comparison to overall Wall Street employment, executives, economists and headhunters say they expect the growth to pick up steam in the coming months. “I think we’re seeing some hiring in anticipation of better times,” said Rae Rosen, a regional economist at the Federal Reserve Bank of New York. “Wall Street typically hires in anticipation of the recovery, and there is a sense that the economy has bottomed out and is slowly improving.” But the headline elides the point of the article. Granted, Rae Rosen believes that Wall Street is hiring in anticipation of better times. But the article, and the data, show that times are already pretty darn good. The Wall Street firms that made it out of the credit crunch and the financial collapse alive are doing just fine , in fact. They have less competition from companies like Lehman Brothers and Bear Sterns. That means more profits. They also are benefiting handsomely from low interest rates. It is Banking 101: Wall Street firms borrow billions from the government for close to nothing, lend it out and make money on the margin. That means more profits. Companies like Goldman Sachs are more profitable now than they were in the boom years. That, really, is why they are hiring — not because they are betting on a strong economic recovery. They are making money hand-over-fist despite the fact that the rest of the economy is ailing terribly, and only starting to turn around.

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Why Is Wall Street Adding Workers?

Vigilance key to foiling scammers Brunswick News Brooks knew it was a scam . Money sent would have been from her own account. “In this economy I can see many people falling for this,” she said. …

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Vigilance key to foiling scammers – Brunswick News

The White House is touting it as “recovery summer”: The economy is adding jobs, the unemployment rate is falling, housing is stabilizing and the $787 billion stimulus is working. But it certainly doesn’t feel that way to America’s young workers, who suffer the worst rates of joblessness of any demographic group — more than 18 percent, compared with 9.5 percent overall. And with July in full swing, their jobs situation is about to get worse. Image by: Matt Mahurin Share States and regional governments have slashed the summer programs that helped more than 320,000 young people find work last year, as stimulus funding is running out and Congress has failed to re-up the funds. Indeed, $1 billion in funding for summer jobs died along with the jobs bill , now being split up and — for some of its components — passed separately. Even if Congress gets to the summer jobs fund, and passes it, for hundreds of thousands of workers, it will be August, and too late. This is just one more headwind in what has become a perfect storm for youth unemployment, as young people, without long employment histories, compete for scarce positions with more seasoned workers. The unemployment rate for 16- to 24-year-olds hit 20 percent this spring, and has declined only slightly since then. In some cities, such as New York, it ranges as high as 40 percent. Nationally, one in four working-age teenagers is unemployed — for black teenagers, closer to one in two. In May, the economy created just 6,000 jobs for teens — 120 jobs per state, the smallest number in 40 years. Spells of unemployment are particularly detrimental for young workers. They tend to have less in savings and less work history than their older counterparts, as well as more debt. Therefore, they are more prone than older workers to falling into poverty when they lose their jobs. And as fewer of them are married, they cannot rely on a spouse’s work for income or health benefits. “Without insurance coverage, these young adults risk both their physical health and their financial security,” the nonprofit Kaiser Family Foundation reported this winter. Moreover, unemployment hurts young workers for longer than older workers. In an April report titled “The Kids Aren’t Alright,” the Economic Policy Institute’s Kathryn Anne Edwards and Alexander Hertel-Fernandez detailed the reasons why. “Work during teen years is characterized as being highly path-dependent — work status in one period is very sensitive to work status in the time period before,” they note. “With a dramatic downturn in the young adult labor market, fewer young workers are being incorporated into this path” — from work in high school to work in college to work afterward. Economists often describe youth unemployment as a “permanent scar,” rather than the “temporary blemish” it is for older workers. Studies show that the lack of early work experience depresses wages for the rest of a worker’s life. Summer jobs programs couldn’t fix all this, but programs funded with the $1.2 billion infusion from the American Reinvestment and Recovery Act certainly were helping. Nationwide, the summer jobs program — centered on aiding young people with barriers to employment, such as pregnancy, school drop-outs or low family income — placed 88 percent of participants into summer jobs. By November 2009, the program helped more than 355,000 young people in all 50 states. Consider San Bernardino County, in southern California. The unemployment rate there is among the highest in the country — more than 14 percent — and the area has suffered from the lagging effects of the recession, especially the housing bust. Last year, stimulus funding meant work for hundreds of San Bernardino youths, and 43,500 young people across California. This year, the county planned to run the same programs, assuming the same level of federal funding, promised by legislators in Washington. (On the expectation of additional federal funds, and a decline in the unemployment rate, state and local governments used more than two-thirds of the available funds by November of last year.) But the money is not there, and the county is shuttering parts of the program. It is not alone. Some places — such as Boston — have found companies or nonprofits to keep programs open. Many have not. Nobody knows how many fewer young workers will benefit, but a tally of big-city programs suggests the number is in the hundreds of thousands. Nor does it look like federal aid will make a late arrival. Even when the Senate returns, it has no plans to resuscitate the jobs package — meaning young workers are on their own. “We served a record number of kids last year,” says Cathleen Collins, a spokesperson for the New York Department of Youth and Community Development, whose summer jobs program placed 52,000 young people last year. “This year, we are getting less funding from the state, and [$18.5 million] less from the federal government. … We monitored [the jobs bill] on an ongoing basis. It really was not clear to us that the funds would go through. So, we had a program that we could ramp up if it did, but the program is smaller this year” — half the size of last year’s, though unemployment in New York City is higher. Kalyani Thampi, a research analyst at the National Center for Children in Poverty, stresses that sustained, consistent investments in young people would be best. “It is worth it. It is cost-intensive, and time-intensive, and labor-intensive for governments to set these programs up,” she says. “But in the long term, these kids are given skill sets.” She also notes that the programs focus not on college graduates unable to get jobs, but on young workers who are more income-insecure to begin with — less educated, for instance. “Vocational training and pre-professional programs are becoming more and more important,” though the recession has forced governments to slash spending on such social-safety-net initiatives. “We have many, many unemployed youths who aren’t going to community college or to four-year degrees. They need to get jobs, and they need to be trained.” In that sense, it is not just the young workers who are missing out — it is the American labor force, missing the opportunity to train young people in the fields of the future.

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Slashed Summer Jobs Funding Hits Young Workers Hard

Yesterday, the International Monetary Fund released a report on the world economy, revising upward its predictions for U.S. economic growth while lowering its projections for many Western European countries. It also cautioned that the global recovery is imperiled due to the sovereign debt crises in Europe: Downside risks have risen sharply. In the near term, the main risk is an escalation of financial stress and contagion, prompted by rising concern over sovereign risk. This could lead to additional increases in funding costs and weaker bank balance sheets and hence to tighter lending conditions, declining business and consumer confidence, and abrupt changes in relative exchange rates. Given trade and financial linkages, the ultimate effect could be substantially lower global demand. In a separate report from late June, released today, the IMF said it does not expect the U.S. economy to fall into a double-dip recession, but that unemployment will stay above 9 percent throughout 2011. That translates into a long, slow recovery characterized by persistent joblessness and sluggish growth in GDP and consumer spending: “The outlook has improved in tandem with the recovery, but remaining household and financial balance sheet weaknesses — along with elevated unemployment — are likely to continue to restrain private spending.” But the biggest risk to the U.S. recovery? Housing: [The] backlog of foreclosures and high levels of negative equity, combined with elevated unemployment, pose risks of a double dip in housing; the continued deterioration in commercial real estate poses risks for smaller banks; and financing conditions remain tight, especially for smaller firms reliant on bank finance.

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IMF: U.S. Unemployment Will Stay Above 9 Percent through 2011

Today, The Washington Post’s Neil Irwin reports that the Federal Reserve — concerned about the sustained high level of unemployment and the general stall-out in the recovery — is considering taking steps to bolster growth. Irwin summarizes the “modest” possible measures: One pro-growth strategy would be to strengthen language in Fed policy statements that the central bank’s interest rate target is likely to remain “exceptionally low” for an “extended period.” The policymakers could change that wording to effectively commit to keeping rates near zero for even longer than investors now expect, perhaps adding specifics about which economic conditions would lead them to raise rates. Such a move would be opposed by many members of the Fed policymaking committee who are wary of the “extended period” language, arguing that it limits their flexibility. Another possibility would be to cut the interest rate paid to banks for extra money they keep on reserve at the Fed from 0.25 percent to zero. That would give banks slightly more incentive to lend money to customers rather than park it at the Fed, although it also could cause technical problems in the functioning of certain credit markets. A third modest possibility would be to buy enough new mortgage securities to replace those on the Fed balance sheet that are paid off as people take advantage of low interest rates to refinance. Irwin, Matt Yglesias and Kevin Drum all note that this is pretty weak tea, particularly when compared with the $1 trillion the Fed pumped into the economy in the midst of the credit crunch, or its massive mortgage-backed security buy-up program. (Drum’s headline? “Fed to Unemployed: Drop Dead.”) Yglesias notes, “My bottom line is that people ought to realize that as a matter of practical politics additional expansionary policies are much more likely to come from the Fed than from the United States Senate at this point. Opinion leaders need to focus more attention on this lever.” But the measures the Fed could take would be more tangential than the ones Congress could. (Expansionary fiscal policy does not translate into jobs as quickly as, say, giving money to states to keep employees on the payroll.) For that reason, I wonder if the Fed would attempt to convince Congress to tackle the unemployment rate head-on. Fed Chair Ben Bernanke could testify that the Hill needs to enact policies to lower the unemployment rate, or else the Fed will have to act — a less efficient and more politically troubling eventuality. And the Fed could include dire warnings about the stalled-out recovery in its minutes. There are enough members of Congress interested in aiding the jobless and keeping the Fed off of its turf that I can imagine it might help win over those one or two Senate votes necessary for big, ambitious bills. Granted, the Fed is not really meant to be a political actor in this way. But it is there to advise lawmakers, and its mandate is to put jobs and stability first.

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What Can the Fed Do About Unemployment?

Tonight, a bill to extend federal unemployment insurance benefits for the long-term unemployed failed in the Senate, 58 to 38. The vote was technically only one short of 60; Senate Majority Leader Harry Reid (D-Nev.) voted no for procedural reasons. Republican Sens. Olympia Snowe and Susan Collins of Maine voted for cloture on the $34 billion bill, which was not offset and therefore increased the deficit. But Sen. Scott Brown (R-Mass.) refused to cross the aisle. Sen. Ben Nelson (D-Neb.) voted with the Republicans. Without Sen. Robert Byrd’s vote — the 92-year-old veteran of the Senate passed away earlier this week — Senate Democrats found themselves one vote short. Reid says the Senate will vote on the bill as soon as Byrd’s replacement is in place. He offered this statement after the failed cloture vote: These are difficult days for thousands of Nevadans and millions of Americans who have lost their jobs through no fault of their own, and there are few words that can comfort these workers who go to sleep every night worried about their economic uncertainty.  That’s why Democrats tried again tonight to extend unemployment benefits that workers and their families depend on as a lifeline while they continue to look for work. It is beyond disappointing that Republicans continue to stand almost lockstep against assistance for out-of-work Americans — especially since many of these same Republicans spent months protecting Wall Street and preserving tax cuts for CEOs who ship American jobs overseas. We will vote on this measure again once there is a replacement named for the late Senator Byrd.  In the meantime, I sincerely hope that Republicans will finally listen to the millions of unemployed Americans who need this assistance to support their families in these tough times. These Americans and millions more demand that Republicans stop filibustering support for unemployed workers. By the time Byrd’s replacement is in place, in mid-July, 2 million Americans will have lost their benefits. The bill extending them will have languished in the Senate for something like 11 weeks.

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Unemployment Extension Fails – Again – in the Senate

Sen. George Voinovich (R-Ohio) today is accusing Sen. Harry Reid (D-Nev.), the Senate majority leader, of playing politics with the federal extension of unemployment benefits. He says Reid rejected a compromise, offsetting half the cost of the bill with stimulus money, to keep the blocked unemployment extension as a cudgel against the GOP. Here is Voinovich’s full statement : I have supported tens-of-billions of dollars in assistance for unemployed families in Ohio thus far and last week supported another unemployment insurance extension which was paid for. Unfortunately my Democratic colleagues blocked that amendment offered by Senator John Thune which also would have paid for tax extenders and FMAP without borrowing money on the credit card of our children and grandchildren. In order to move forward, yesterday I told Leader Reid that I would support extending unemployment insurance if Democrats would be willing to use some of the estimated $40 billion in unspent stimulus monies to help offset at least half of the stand-alone unemployment insurance extension. He flatly rejected this request even though Democratic Leadership was going to take $10 billion from the stimulus to help pay for business tax breaks just last week. My concern is that the Democrats are more interested in having this issue to demagogue for political gamesmanship than they are in simply passing the benefits extension. I came to the table with a fair compromise and the ball is in their court. Voinovich might have been and still might be the decisive 60th and final vote for cloture on the bill, stalled out for a month now, costing 1.2 million Americans extended benefits. He has voted for earlier incarnations of the extension. Republican Sens. Olympia Snowe and Susan Collins of Maine are a likely yes for the bill; Sen. Scott Brown (R-Mass.) is a likely no — leaving Democrats one short .

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Voinovich: Reid More Interested in Bashing GOP Than Passing Unemployment Extension Bill

Congress has never before let federally extended unemployment benefits drop with an unemployment rate so high: That is the takeaway from a searing new report from the National Unemployment Law Project and the Center for American Progress. The report analyzes the historical scope of the current unemployment benefits extension, and argues for the value of the benefits for families and — especially — the many millions classified as long-term unemployed. It notes that in the past, Congress has extended benefits until the unemployment rate has dropped to 7.2 percent or lower. Economists do not project the jobless rate to fall that low until at least 2013. House and Senate Democrats are currently mounting a push to re-up federally extended unemployment benefits for another three months or more. Republicans are proving recalcitrant, arguing they will not vote for bills that increase the deficit. Most unemployment extension bills cost around $35 billion — about one percent of the $3.6 trillion federal budget.

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An Unprecedented End to Extended Unemployment Benefits

The House is currently voting to move a standalone unemployment insurance bill, and I’ll update when they are done. But encouraging news from the Senate side as well for unemployed Americans looking for a benefits extension. A Senate Democratic leadership aide says Majority Leader Harry Reid (D-Nev.) is working with members of the Republican caucus and hopes to move a standalone bill this week, possibly Sen. Debbie Stabenow’s (D-Mich.) or possibly another provision — before the July 4 recess.

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Reid Working With Republican Caucus to Move UI Bill

This Gallup poll , in some ways, is tautology: Republicans are conservative about the role of government, and Democrats are liberal. Members of the GOP believe that the government has overextended itself wildly — trying to convince businesses to hire more workers, cajole banks to reform and give more loans, persuade consumers to purchase more goods and save millions of American families from the economic ravages of joblessness. Democrats believe the government is not doing enough. In the past few months, deficit spending has become the battleground for those beliefs. On the Hill, Democrats are desperate to push through legislation that would do much to help the poor and the jobless — providing Medicaid and unemployment benefits, as well as a host of other measures. There, Republicans have drawn the line in the sand. What is interesting to note is that Republicans are winning. They killed legislation that should have been unremarkable, even popular. And they have managed to shift the argument to deficits, to convince the government to trim its programs back, despite economic consensus that the economy needs sustained governmental stimulus until demand returns.

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Republicans: Stop Doing So Much; Dems: Do More

America’s consumers — aware of the bad economic stats and suffering from high rates of unemployment — are not feeling confident. From the Conference Board’s report on its closely watched consumer confidence index: [The index], which had been on the rise for three consecutive months, declined sharply in June. The Index now stands at 52.9 (1985=100), down from 62.7 in May. The Present Situation Index [which measures how consumers feel about their current financial state] decreased to 25.5 from 29.8. The Expectations Index [which measures where consumers feel things are headed] declined to 71.2 from 84.6 last month. Consumers’ appraisal of present-day conditions was less favorable in June. Those saying conditions are “good” decreased to 8.0 percent from 9.7 percent, while those saying business conditions are “bad” increased to 42.4 percent from 39.5 percent. Consumers’ assessment of the labor market was also less favorable. Those claiming jobs are “hard to get” increased to 44.8 percent from 43.9 percent, while those saying jobs are “plentiful” decreased to 4.3 percent from 4.6 percent. Economists had expected the index to have fallen to 62 in June, according to estimates by CNN. “Consumer confidence, which had posted three consecutive monthly gains and appeared to be gaining some traction, retreated sharply in June,” Lynn Franco, the director of the Conference Board, said in a statement. “Increasing uncertainty and apprehension about the future state of the economy and labor market, no doubt a result of the recent slowdown in job growth, are the primary reasons for the sharp reversal in confidence. Until the pace of job growth picks up, consumer confidence is not likely to pick up.” The issue here is not just that regular folks are feeling financially stressed. It is that prophecies like this tend to be self-fulfilling. If you are concerned that the economy is not getting any better, you might consider saving more of your salary in case you are laid off. That means you are not spending that money, which hurts businesses, which makes them hire fewer workers, which means you hear about more bad jobs reports, which in turn makes you more worried. It is a vicious cycle. A few strong jobs numbers could do a lot to improve confidence. But, unfortunately, few economists expect a bolstered labor market recovery anytime soon. If anything, they believe unemployment will edge down slowly over the course of the next few years.

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Consumer Confidence Crashes in June

A tiny shot of good news amid otherwise dismal recent numbers: Consumers opened their wallets a bit more in May, spending 0.2 percent more than in April. Incomes rose 0.4 percent, and the savings rate increased as well, to the highest level since September. Economists expected consumer spending — which accounts for around 60 percent of the economy — to rise 0.1 percent. The number is not bad, but also not particularly good. It is too low to show the kind of increases in aggregate demand that might help spur the economy to create more jobs, and therefore more evidence of a continuation of the painfully slow labor-market recovery ahead.

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Consumer Spending Ticks Up More Than Expected

Earlier today, I participated in a reporters’ call with Sens. Debbie Stabenow (D-Mich.) and Sherrod Brown (D-Ohio), regarding the collapse of the jobs bill , also known as the extenders package or H.R. 4213, yesterday. They lashed out at Republicans and made the case for the stimulative effect of unemployment insurance — also accusing Republicans of cynically starting to worry about deficits they caused in the midst of an unemployment crisis. Here is a flash transcript of some of the remarks: Stabenow on what the collapse of the bill means: People who lost their job through no fault of their own [got] caught up in this economic crisis. We didn’t even get one Republican colleague to join us to stop the filibuster. What we saw instead was them standing with the oil companies and the corporations shipping jobs overseas and wealthy investors. [This was] very much like the fight on Wall Street reform, where we saw them standing with those who wanted to block any changes. And, it’s very much what we’ve seen from them all the time in the Senate. We’re at 244 objections now, 244 efforts to block us from moving forward. It’s unheard of, absolutely unheard of. We’ve never seen the kind of obstruction that we see now. People who lost their jobs are being caught up in this, and used as political pawns in a partisan battle about an election. Brown on who the collapse of the jobs bill has hurt: These are people who, if they lose their insurance, if they don’t get unemployment insurance, they’re more likely to lose their health care. They’re more likely to lose their home … Most Senators voting against [the bill] do not personally know people who have lost their jobs, lost their health care, lost their homes … Some Senators think unemployment is welfare. It’s called unemployment insurance, not unemployment welfare. You pay in when you’re working, to help you when you are not. Brown on Republican hypocrisy: [Republicans] voted for tax breaks [and] two wars without paying for them … now that it’s unemployment, now that it’s middle-class workers that need help with unemployment compensation or to keep their health insurance, then all of a sudden they’ve got budget religion, then everything is about cutting government spending. Brown on the impact of unemployment insurance: We want to extend these benefits. And we want to extend them clearly because it is good economics … [Sen. John McCain’s (R-Ariz.) own] economic adviser argued that unemployment compensation has the best stimulative effect in terms of the multiplier effect. We’re all concerned about the national debt. Sen. Stabenow and I have been concerned about it for a decade and a half. And that’s why, when [President Bush took office], we had left it with a budget surplus. When I hear Republicans talk about the budget deficit — after the war, tax cuts, Medicare, insurance company bailouts — they caused it. It appears a bit hypocritical. I’m interested in dealing with the deficit, but at this stage in the recovery, we can’t. Stabenow on the relationship between unemployment and the deficit: We’re never going to get out of the deficit if 15 million people are out of a job. Stabenow on governors needing federal aid for states: There is a group of governors coming in on Monday. It’s my hope that we’ll see the Republican governors talking with us stand up and join, so it’s a bipartisan effort [to push for funding for states]. We received a letter prior to the vote from 47 governors, Republican and Democrat, asking us to pass this critical state funding. What’s [going to be] most helpful to us is to have the Republican governors talking to their Republican colleagues.

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Stabenow, Brown Lash Out at Republicans for Killing Jobs Bill

Sen. Debbie Stabenow (D-Mich.) (Zuma Press) Sen. Debbie Stabenow (D-Mich.), whose state has the second-highest unemployment rate in the country, just held a conference call with reporters, in which she expressed her belief that Republicans have cynically joined together to stop the jobs bill, also known as the tax extenders package or H.R. 4213, to keep the unemployment situation bad, or possibly make it worse, for their own electoral gains in the fall. Image by: Matt Mahurin Share Here is a flash transcript of some of her remarks: On Republican obstruction: It’s an extremely maddening and concerning time right now, and frankly we need your help. We’re in a situation where, after spending at least eight weeks on the floor trying to pass this jobs bill, which focuses on creating jobs as well as helping people … not one Republican is willing to help us stop this Republican filibuster. We’ve spent a tremendous amount of time and discussions to get just one person to join us. And we don’t have that. So, we will be voting again today to stop the filibuster and we have every anticipation that we won’t have the votes. It is very clear that the Republicans in the Senate want this economy to fail. They see that things are beginning to turn around. You know the numbers. When this president took office, we were losing 750,000 jobs a month. … Now we are gaining jobs. … Unfortunately, and cynically [on their part], in cynical political terms, it doesn’t serve them in terms of their elections if things are beginning to turn around. I believe when you look at this bill, which is all paid for — we raised revenues to pay for it — the one piece that is technically not paid for [is the federal unemployment benefit extensions and] that is done in a way that we have always done it, … [those are] always categorized as an emergency. And, frankly, if 15 million people without jobs is not an emergency, I don’t know what is. On who Republicans are helping: When you look as well underneath they are protecting wealthy investors, corporations sending jobs overseas and big oil companies — because we have included provisions to close tax loopholes in each of those areas. Republicans are standing with them at a time when we desperately need to keep this economic recovery going and we desperately need to help people who are hurt. In Michigan, it’s estimated that by the end of this month we’re going to have 87,400 who are going to lose help, temporary help, in their unemployment benefits, by the end of this month. That’s literally the difference between somebody keeping a roof over their head, food on the table and a little gas in the car to go look for work. I’m frankly outraged about what has been happening. On what will happen if the bill fails: We will put this temporarily aside. We have no choice. We met every single objection, we’ve negotiated — we’ve tried to meet what we’re viewed as concerns on the other side. Every time we tried to do that they changed the concerns. We can come back to it in a moment’s notice. … [But] we will temporarily put it aside. We’re going to move on to another jobs bill, focused on small businesses. On the impact of Republican intransigence: They’re willing to take down the people of this country with them. Republicans are out of work too. There are Republicans’ and Democrats’ businesses that need the access to capital and [other provisions] in this bill. On the White House’s involvement in pressing Sens. Susan Collins (Maine), Olympia Snowe (Maine) and Scott Brown (Mass.), viewed as the most likely Republicans to switch: They’re very strongly pushing to get this passed. The negotiations have been primarily been with senators at this point. But the president and the White House are on the phone multiple times a day with the [majority] leader Sen. [Max] Baucus (D-Mont.). On what this augurs for future jobs bills: This is an extremely bad sign, because, based on the inability to get at least one Republican — in the past, we’ve had the ability to work, certainly, with members of the Republican caucus and get people of good will, willing to negotiate. The fact that’s not happening now and everything seems to be turned over to [Senate Minority Leader Mitch McConnell (R-Ky.)], it appears that everybody in the Republican caucus has gone purely into election mode [before] the fall. If they can stop the recovery from occurring, if they can create as much pain as possible, people will be angry and will not vote at all or will vote against those in the majority. This is a very cynical political strategy and I sure hope it doesn’t work. On continuing to fight: My hair is even redder than ever. This is about real people. This is not some political, cynical game here.

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Stabenow: Republicans in ‘Cynical Game’ to Crater Economy by Stopping Jobs Bill

Today, the Senate is debating the tax extenders’ package, also known as the jobs bill or H.R. 4213. The beleaguered legislation has been cut by more than $100 billion to appease centrists and deficit hawks who still refuse to vote for it as it expands the deficit by around $20 billion. But what do those billions get? Medicaid funding for the states, extended unemployment insurance benefits for millions of Americans and a host of measures to close tax loopholes. Shockingly, the bill might actually fail to pass due to the Democrats losing the vote of Sen. Ben Nelson (Neb.) and failing to win over a Republican — presumably Sen. Olympia Snowe (Maine), Sen. Susan Collins (Maine) or Sen. Scott Brown (Mass.). Sen. Harry Reid (D-Nev.), the majority leader, is not known as much of a rhetorician. But he gave a good, passionate speech opening debate again on the floor this morning — and giving a good rundown of what is in this tossed-salad of a bill: I want to take some time this morning to update our fellow Senators and our constituents watching around the country about the bill currently before this body. This bill creates jobs, cuts taxes and closes corporate loopholes.  It’s a good bill.  It’s a necessary bill.  This bill will make our economy stronger. It’s a bill I’m fighting for because the recession has driven Nevada’s unemployment rate higher than any other in the entire country. I’m fighting for it because we need to help small businesses grow and hire and once again be the engine that runs our economy. I’m fighting for it because I don’t think big businesses should get rewarded for shipping jobs out of America when so many here at home are desperate for a paycheck and the dignity of a day’s work. This is the eighth week since March we have tried to find a resolution.  We have gone back and forth countless times, considering ideas, compromising where necessary and courting support. We tried to bring it to the floor, but the minority said no. Once we finally succeeded in bringing it here to the floor, we tried to bring it to a vote. Again, the minority said no. Somewhere along the line, throughout these charades, this job-creating, tax-cutting, loophole-closing bill has become a political football.  The debate has focused more on winning and losing than on doing what’s right. So I want to take a step back and talk about what’s really in the text of this legislation.  Let’s be crystal clear about all the good things a “yes” vote enables us to do — and what a “no” vote stops us from doing. This bill: Extends the tax deduction for students’ tuition. Extends the deduction for state and local sales taxes. Extends the standard deduction for property taxes. Extends the deduction for the cost of classroom supplies purchased by teachers. Includes a $4 billion extension of Build America Bonds that provide low-cost financing for infrastructure investments. Extends Small Business Administration lending programs that provide low-cost loans to small businesses. Provides $2.5 billion in funding for state wage assistance programs to help people move from welfare to work. Extends the Research and Development tax credit that provides more than $6 billion in assistance to firms conducting research on new technology. Provides $5 billion in New Markets Tax Credits that encourage investment in economically-distressed areas. Allows retail and restaurant businesses to write off property investments over 15 years rather than 39 years. Provides tax credits to assist mining firms with their rescue team training and to purchase safety equipment. Provides wage assistance to firms that continue paying normal wages to employees who are members of the military’s reserves and are on active duty. Contains incentives to encourage film and television productions in the United States. Later today, we’ll hold a vote on all of these items.  Those who want to help middle-class America will vote “yes.”  Those who want to protect corporate America will vote “no.” Those who want to create jobs and create the conditions for recovery will vote “yes.”  Those who want to kill jobs, who want to stop our recovery in its tracks and who want to keep things the way they are will vote “no.” Those who want our economy to prosper and succeed will vote “yes.”  Those who want this Congress and this economy to fail will vote “no.” Those who put people first will vote “yes.”  Those who put politics first will vote “no.” The American people are watching, and they’re waiting for us to act.  They demand that their Senators understand what they’re going through and how badly they’re struggling. I understand.  I know what the people of Nevada are going through.  I know how much a good bill like this one will help those families and small businesses. I hope other Senators here do, too — for the sake of those in my state, for the sake of those in their own states and for the sake of our nation’s economy. As for those who still don’t see the value in creating jobs, cutting taxes and closing corporate loopholes — I hope they’ll take some time today to come to the floor and listen to their fellow Senators who believe in this bill.  I hope they’ll listen with an open mind, and with their constituents’ best interests in mind. The time to decide is closing in on us, but it’s not over yet.  It’s not too late to do what’s right.

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Reid Fights for Fading Jobs Bill on Senate Floor

This morning, the Bureau of Labor Statistics reported that initial jobless claims fell by the largest amount in two months. Still, they remain high — at 457,000, 19,000 less than last week but just 2,000 less than a fortnight ago — demonstrating the continued sluggish pace of job growth. The new claims number dropped slightly more than economists predicted . Claims need to fall below 425,000 to signal real job growth, given that the labor force constantly expands. This chart shows claims since the beginning of 2007. See the plateau in sustained, high claims on the right:

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Initial Jobless Claims Remain Stuck Above 450,000

Today, Gallup released a weekly survey of consumer spending — a good metric to keep an eye on, as it accounts for around 60 percent of the U.S. economy. Consumer spending had made gains last month, as high-income Americans returned to malls and restaurants. But more recent surveys show that the blip was temporary, and consumption remains around the same level as it has for the past year, tracking up only slowly. Gallup surmises, sensibly, that upper-income Americans are spooked by the continued economic bad times and the crisis in Europe : With middle- and lower-income consumer spending remaining flat as underemployment remains high, it seems that a recovery in overall consumer spending will depend to a large extent on upper-income consumers. It may be that these consumers, despite having a desire to return to spending, have been spooked by recent signs of a weakening U.S. economy, combined with the oil spill in the Gulf, global financial difficulties, and possibly future tax uncertainties. As a result, upper-income Americans, like other consumers, may be returning to the new normal spending levels of 2009. If this turns out to be the case, it could easily mean a slower economy than many had hoped for as the remainder of the year unfolds.

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Consumer Spending Growth Stalls Out as the Rich Close Their Wallets Again

My former colleague Mike Lillis, now at The Hill, reports that Senate Democrats are attempting to win over Maine Republican Sens. Olympia Snowe and Susan Collins on the tax extenders bill — also known as the jobs bill or H.R. 4213 — by cutting federal Medicaid funding for the states. As currently written, the bill gives states an additional $24.2 billion to provide health care coverage to low-income Americans as claims expand in the tough economy. The House version of the bill cut the extra Medicaid funding to appease deficit hawks. Many states already have the additional funding written into their budgets. Mike has the details on the cut: Under an $87 billion provision of the 2009 economic stimulus bill, states received at least a 6.2 percent increase in the federal share of Medicaid funding, but that extra help expires at the end of 2010. Senate Democrats have pushed to extend that assistance through June of 2011 in order to help states shore up their budgets during a lean economy. But budget hawks opposed the proposal, which was estimated to cost nearly $24 billion. Instead, Democrats are now proposing to provide a 5.3 percent increase in federal Medicaid funds in the first quarter of 2011, and a 3.2 percent increase in the second quarter of 2011. And here is CQ on the politics : One key swing voter, [Collins], noted that she has long advocated for a phase-down approach to the Medicaid assistance that would avoid a cliff for state budgets. “I proposed it over a year ago, because I thought it was good policy,” she said. [Snowe] said she has been meeting with Democrats about the bill and that they are looking at an approach that would shrink the cost of the Medicaid provision to $20 billion and use $4 billion in unspent stimulus money to cover some of that cost. Then, Snowe said, she has been urging Democrats to look at various spending items in the bill to see if they could be reduced. However, Snowe also wants to remove several of the revenue-raising provisions, which could increase the amount that is not paid for. The delayed passage of the extenders legislation has led to cuts in Medicare reimbursement rates to doctors (though they should be retroactively reimbursed) and left hundreds of thousands of Americans without extended unemployment insurance benefits.

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Senate Dems Eye Medicaid Cuts to Win Passage of Extenders Bill

Democrats have been trimming and cutting and adding measures to the jobs bill — also known as the extenders’ bill or H.R. 4213 — that stalled out in the Senate. Yesterday, to appease deficit hawks and the 12 Democrats who voted against authorizing emergency deficit spending on the bill , they trimmed back unemployment benefits and reimbursements to doctors, saving around $20 billion. The new version takes away a $25-a-week supplement to federally extended unemployment insurance payments, authorized last November, saving $5.8 billion. Anyone receiving the $25 will continue to get it until the expiry of their benefits or Dec. 7, whichever is sooner. New claimants will not receive the benefit. And, trimming $16.4 billion, the bill will stave off a 21 percent cut to Medicare reimbursements to doctors just until November, rather than next year. The negotiations also revised upward the amount of money investment managers need to declare open to income taxes, rather than capital gains taxes, and hiked a tax on oil. The initial bill that failed in the Senate spent $140 billion, $80 billion of which would have added to the deficit. The House had to trim its bill twice to appease deficit-wary “Blue Dog” Democrats — including dropping $24 billion in Medicaid funding for states. That provision remains in the Senate bill.

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The New, Leaner Jobs Bill

Via Matt Welch at Reason, Sen. Orrin Hatch (R-Utah) has proposed an amendment to the jobs bill requiring that recipients of unemployment insurance or welfare benefits get drug tested before they get their checks. From the Salt Lake Tribune : People seeking unemployment benefits or welfare would have to first pass a drug test under a proposal Sen. Orrin Hatch will try to add to legislation extending the social safety net during this time of economic turmoil. Hatch … said his idea would help battle drug addiction and could reduce the nation’s debt. He will try to get the Senate to include his amendment to a $140 billion bill extending tax breaks and social programs this week. “This amendment is a way to help people get off of drugs to become productive and healthy members of society, while ensuring that valuable taxpayer dollars aren’t wasted,” he said after announcing his amendment. “Too many Americans are locked into a life of a dangerous dependency not only on drugs, but the federal assistance that serves to enable their addiction.” Currently, about 4.4 million families receive assistance through the Temporary Assistance for Needy Families program. On top of that, 9.8 million people are receiving unemployment insurance in some form. Millions more get other kinds of aid. Granted, the federal government does plenty of drug testing already, but does it really want to process 15 million new urine samples? Plus pay for all the court cases the law would create? The Drug Policy Alliance notes that “a 2003 ruling by a federal appeals court that covers the states of Kentucky, Michigan, Ohio, and Tennessee ruled that states cannot drug test welfare recipients because it’s unconstitutional.” Welch writes, “This is, alas, nothing new . In addition to social-welfare recipients , lawmakers have identified several other sub-classes of people ripe for being forced by the state to urinate on command, including (but not limited to) student athletes , kids who dare take part in other extra-curricular activities ,” and others.

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Orrin Hatch: Let’s Drug Test Unemployment Insurance Recipients

At least Macroeconomic Advisers says so . Ben Herzon explains: Early in the recovery many forecasters, concerned that the nascent expansion was fueled only by temporary inventory dynamics and short-lived fiscal stimulus, fretted over the possibility of a double-dip recession. Now, with the emergence of the sovereign debt crisis in Europe, that concern has re-surfaced. Certainly we recognize that the debt crisis imparts some downside risk to our baseline forecast for GDP growth. However, based on current, high-frequency data — most of which is financial in nature and so is not subject to revision — we believe the chance of a double-dip recession is small. [The probability of having a month of recession in the next 12 is] a function of the term slope of interest rates, stock prices, payroll employment, personal income, and industrial production…term slope, stock prices, credit spreads, bank lending conditions, oil prices, and the unemployment rate. Currently this model, updated through May’s data, estimates that the probability of another recession month occurring within the coming year is zero. On the one hand, this is good news: A double-dip, perhaps one fueled by continued declining home prices or another credit crunch caused by the Greek debt crisis, would be terrible. On the other, if GDP does not expand or contract — meaning the economy is not technically in a recession, but things remain as bad as they are — or if GDP expands only slowly, that is still a terrible outcome, entailing stagnated incomes for families and high rates of unemployment.

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Chance of a Double-Dip ‘Essentially Nil’

NewswireToday (newswire) – 06/10/2010 Phoenix, AZ United States – Local First Arizona economic study finds half-billion dollar annual impact from newly privatized SCF Arizona

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Privatized SCF Arizona Impacts Arizona Economy by Nearly Half Billion

This morning, Federal Reserve Chairman Ben Bernanke is testifying before the House Committee on the Budget about the current economic situation and the federal budget. These are contentious times when it comes to the relative importance of debts and deficit-spending. Hawks — and the American public — are deeply worried about the $13 trillion in the red the government finds itself in and the specter of inflation. Doves — and the American public — are concerned that the sky-high unemployment rate and slow recovery means the government might need to raise deficits more to boost growth and create jobs. Bernanke’s remarks could have been controversial — particularly given that several members of the Fed have started to call for rate hikes that would cool off the economy but prevent inflation from taking hold. But his prepared testimony and the hearing thus far offer a dose of cool realism: Things are bad but getting better slowly, and the debt situation is “unsustainable.” First, Bernanke noted the headline statistics: “Real gross domestic product will grow in the neighborhood of 3.5 percent over the course of 2010 … probably [meaning] only a slow reduction in the unemployment rate over time. In this environment, inflation is likely to remain subdued.” Still, he did not advocate for more deficit spending or stimulus: “Although the support to economic growth from fiscal policy is likely to diminish in the coming year, the incoming data suggest that gains in private final demand will sustain the recovery in economic activity.” He again noted the drag the housing market has had on the economy: “In the housing market, sales and construction have been temporarily boosted lately by the homebuyer tax credit. But looking through these temporary movements, underlying housing activity appears to have firmed only a little since mid-2009, with activity being weighed down, in part, by a large inventory of distressed or vacant existing houses and by the difficulties of many builders in obtaining credit.” He did not elaborate on the possibility of a continued decline in home prices, and the ripple effect that might have on the economy. He spoke about Europe and Greece, and warned that the United States should learn something from across the pond, without scaremongering: “Ongoing developments in Europe point to the importance of maintaining sound government finances. In many ways, the United States enjoys a uniquely favored position. Our economy is large, diversified, and flexible; our financial markets are deep and liquid; and, as I have mentioned, in the midst of financial turmoil, global investors have viewed Treasury securities as a safe haven.” And he saved his strongest words to state that deficits should only be widened in emergencies, calling the current path “unsustainable” ( emphasis added) : “ The exceptional increase in the deficit has in large part reflected the effects of the weak economy on tax revenues and spending, along with the necessary policy actions taken to ease the recession and steady financial markets. As the economy and financial markets continue to recover, and as the actions taken to provide economic stimulus and promote financial stability are phased out, the budget deficit should narrow over the next few years. Even after economic and financial conditions have returned to normal, however, in the absence of further policy actions, the federal budget appears to be on an unsustainable path. ” Watch Bernanke respond to questions from House committee members here .

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Bernanke: Debt Is ‘Unsustainable’

The May jobs number is out, and at first blush it looks good. The economy added 431,000 jobs in May and the unemployment rate tracked down to 9.7 percent. But the report, in reality, is terrible, another sign of the long-standing crisis of joblessness in the United States. Economists were hoping that the private sector would add between 100,000 and 200,000 jobs. But private employers expanded their payrolls by a measly 41,000 positions. That is simply not enough: The United States needs to add 100,000 to 150,000 jobs a month just to keep pace with population growth, and jobs need to grow a lot faster than that to make a dent in the headline unemployment rate. Fifteen million Americans are unemployed, several million of whom have been out of work for more than six months and more than one million of whom have been out of work for two years . Again, crisis is the appropriate word. Politicians might try to spin this. This morning Christina Romer, the head of the administration’s Council of Economic Advisers, wrote on the White House blog that today’s report “shows continued signs of labor market recovery.” She posted this chart, where the trends do look good. But if you take that right-most blue bar — which shows job growth — and take out the temporary census jobs, it’s barely existent. And once the census is over, those jobs are gone. Washington has not run out of options to tackle the unemployment crisis. The government could expand, directly hiring workers. (As the census demonstrates, when the government hires workers, unemployment goes down.) It could push tax incentives and stimulus, so that Americans spend more and companies decide to hire more workers. It could take up Rep. George Miller’s (D-Calif.) Local Jobs for America Act , providing $75 billion to local governments to keep employees on the payroll. Or it could have considered Sen. Tom Harkin’s (D-Iowa) proposal to grant $23 billion to keep public school teachers in their classrooms, the Keep Our Educators Working Act. Both of those bills would have preserved or created local government jobs, and a spate of other congressional initiatives are aimed at private-sector hiring. But the issue at this point is not ideas, but will. Congress has simply lost its appetite for expensive job-saving or job-creating programs given the deficit. That does not mean the economy won’t recover. It will. But it means that unemployment will continue to lag behind the recovery, sustaining severe hardship for families and individuals.

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Unemployment Remains in a State of Crisis

Today, Automatic Data Processing, or ADP, which processes payrolls for private companies, said that the private sector added 55,000 jobs to payroll in May — the fourth consecutive month of increases. Economists expected private companies to add around 60,000 jobs. In April, they added 65,000 positions. The news bodes well for a strong unemployment report on Friday. The job force should grow considerably due to census hiring. (The government offers work to around 500,000 people when conducting the decade’s census.) Even without that, though, economists are hoping for the economy to have added around 100,000 jobs. Vice President Joe Biden seconded that assessment when speaking with Charlie Rose last night. We lost 8 million new jobs since we hit the skids. … It’s going to take us several years to get back to that number. Here’s what I can tell you. I predicted — and I got in trouble for predicting this, but I turned out to be right, as I might very vainfully point out — that we’re going to be creating jobs … by the middle of the end of the first quarter [of 2010]. We are. We continue to create jobs. And I predict that we would create 250,000 jobs last month; we actually created 280,000 jobs. I think we’ll create between 100,000 and 200,000 jobs [per month] on average all the way through this year, increasing it next year beyond that. Rose then asks him how long it will take for unemployment to return to 6 percent. Biden says it is unknowable, but depends on two main things: Europe and consumer confidence. The answer to that question is unknowable for [a few] reasons. One: We don’t know what’s going to happen in Europe…[Two:] We also have never been able to accurately measure what is the ultimate engine of this economic growth — consumer confidence. My mantra with our economic team is, and they just think I’m an optimist, America caught every bad break ont eh way down. It’s time we catch some good breaks on the way up. Just a change in consumer confidence and their willingess to go out and spend can significantly increase and change the rapidity with which we bring down that unemployment rate.

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Private Payrolls Up in Advance of Friday Jobs Report

Today, the Labor Department released its April survey of unemployment in 372 metropolitan areas across the United States. And it is a very good report: The rate of joblessness dropped in 346 areas, rose in 12 and remained flat in 14. That is a significant month-to-month improvement, as in March, unemployment fell in 257 metro areas and climbed in 89. The report bodes well for Friday’s major jobs report. Economists expect the economy to have added 500,000 jobs and the overall unemployment rate to track down. The data will be slightly skewed because of temporary census hiring. Still, it will hopefully augur an accelerating recovery, given that the weekly initial jobless claims and other metrics have stagnated . Year-on-year, the stats are less good: The unemployment rate rose in 291 metro areas and fell in 73. In April, El Centro, Calif., recorded the highest rate of joblessness — 27.9 percent. The state in general carried the greatest number of hard-hit areas. Of 14 metro areas with unemployment rates above 15 percent, 11 were in California.

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Unemployment Falls in 93 Percent of Metro Areas

To discourage businesses from outsourcing their operator services, Sen. Charles Schumer (D-N.Y.) is proposing legislation to tax businesses that set up help lines overseas. The levy, under Schumer’s bill, would be a quarter-cent per call. Reuters reports : Customers calling 800 numbers are often transferred overseas, and in such cases the bill would mandate that callers be told where their calls were rerouted. Companies would also be required to certify to the Federal Trade Commission annually that they were complying with the requirement, and face penalties if they did not certify. “This bill will not only serve to maintain call center jobs currently in the United States, but also provide a reason for companies that have already outsourced jobs to bring them back,” Schumer said in statement. And that might be true, but don’t expect the investor class to jump on board. (And don’t expect Wall Street, which Schumer represents, to be pleased either.)

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Schumer Wants to Tax Businesses Using Overseas Call Centers