HispanicBusiness

A broad jobs bill by Jan Schakowsky, D-Ill., calls for spending $100 billion to create 650,000 school construction and maintenance jobs in two years.

Yet anything that looks even remotely like the $800 billion economic stimulus might face an uphill fight in Congress.

A more politically palatable option that's gaining some traction is an infrastructure bank that would provide loans and loan guarantees to private firms that could recoup their investments through highway tolls or local sales taxes. Obama has pushed the idea. And a bill by Sens. John Kerry, D-Mass., and Kay Bailey Hutchison, R-Texas, would leverage $10 billion to $160 billion in public financing to generate up to four times as much in private investment.

U.S. Chamber of Commerce CEO Tom Donohue this week said, "There is lots of private money there" to invest in infrastructure improvement.

Here's the rub: Such a bank could take at least a year or two to get up and running, so it wouldn't provide the kind of short-term stimulus needed to quickly jump-start the anemic job market.

Give states a helping hand

Since early 2010, budget-crunched state and local governments have cut 425,000 jobs even while private employers have added 2.3 million. States face budget shortfalls totaling $103 billion in the current fiscal year, helping to force an additional 300,000 state and local layoffs by the end of 2012, according to the Center for Budget and Policy Priorities and Mark Zandi, chief economist at Moody's Analytics.

The government could provide up to $20 billion to states to save about 200,000 teaching and other government jobs. That's probably the quickest way to prop up payrolls, says Michael Ettlinger, vice president for public policy at the liberal Center for American Progress. A $50 billion program would close half the $97 billion deficit states face for Medicaid payments, saving about 500,000 jobs, Fieldhouse says.

Schakowsky's bill would spend $227 billion to create 2.2 million jobs in two years, at a per-job cost of about $50,000 a year, all through existing funding programs that can disburse the money within weeks to states and localities. Besides the school repair projects, her plan would hire about 350,000 teachers, police officers and firefighters, 40,000 health care workers and 100,000 youths to spruce up parks.

Add workers, at a discount

If you want to boost sales, cut the price. That's basically the idea behind a tax credit for each new employee a business hires over its staffing level the previous year. To make an impact, the government should offer a per-employee credit of $10,000 as well as 10% of increased wages for two years, says Michael Greenstone, a senior fellow at the Brookings Institution.

"This is most directly targeted at the thing you want: more employment," he says.

A similar tax credit last year didn't appear to light a fire under employers. Those that hired people who were jobless at least eight weeks were exempt from the 6.2 percent Social Security payroll tax. Employers of 10.6 million workers from February through October 2010 were eligible for the credit, which saved as much as $3,480 for the addition of a $40,000-a-year worker. But the Treasury Department acknowledges it doesn't know how many of those workers would have been hired anyway.

Both the U.S. Chamber of Commerce and the National Federation of Independent Business oppose a hiring tax credit, saying companies add workers because of increased sales, not temporary windfalls.