Worried about an unemployment rate that now tops 10%—and is much higher for the construction sector—Congress has reacted with a package of extended and broadened tax breaks aimed at spurring housing and giving a boost to businesses in general. President Obama signed that bill on Nov. 6, but he and key congressional Democrats and industry officials agree more action is needed to turn around the grim jobless figures. In a move that could provide targeted help for construction, the White House is considering increased public-works funds as part of a recovery plan.
Source: U.S. Dept. of Labor Bureau of Labor Statistics
The bad news that sparked the new moves was the Bureau of Labor Statistics' Nov. 6 report that the nation’s jobless rate hit 10.2% in October, its highest level since April 1983 and an increase from September’s 9.8%.
For construction, the picture is significantly worse. BLS said the industry shed 62,000 jobs in October, hiking its unemployment rate to 18.7%, from 17.1% the month before.
Perhaps anticipating the worrisome jobs numbers, Congress on the eve of the BLS report gave final approval to the Worker, Homeownership and Business Assistance Act. It extends and enhances American Recovery and Reinvestment Act housing and business tax breaks and unemployment benefits.
As Obama signed the bill, just hours after the BLS report came out, he said the administration is examining other steps to give the economy a lift. The President said his economic advisers are “looking at ideas such as additional investments in our aging roads and bridges, incentives to encourage families and businesses to make buildings more energy-efficient, additional tax cuts for businesses to create jobs, additional steps to increase the flow of credit to small businesses, and an aggressive agenda to promote exports and help American manufacturers sell their products around the world.”
House Appropriations Committee Chairman David Obey (D-Wis.) also called for additional action to give the economy an “effective short-term boost,” adding, “It is clear from the latest employment news that we need to give the economy a bigger kick. While the Recovery Act is working, as I said when we passed it, it is not big enough by itself to do everything we need it to do to get workers back to work.”
Neither Obama nor Obey spelled out how much new money they’re thinking about or when a proposal will be announced. Anirban Basu, Associated Builders and Contractors’ chief economist, says, “It’s important to note that we are now approaching the period of the mid-term elections. It’s very important to the administration to begin to reduce unemployment rates. And the only way to do that is to create jobs in a hurry. And one of the best ways to create jobs is through infrastructure investment.”
Jeffrey D. Shoaf, the Associated General Contractors’ senior executive director for government affairs, suggests three possible legislative vehicles for new public-works funding. One is to accelerate the surface transportation reauthorization. The last such measure, the Safe, Accountable, Flexible, Efficient, Transportation Equity Act—a Legacy for Users, expired on Sept. 30, was extended twice and now is due to expire on Dec. 18.
House Transportation and Infrastructure Committee members “believe that more investment is needed, and we think the best way to do that is through a six-year surface transportation bill,” says a spokesperson for...