The health care reform debate in the Senate is going to have a fascinating sideshow to watch. There are several must-pass measures Congress has to tackle before the year’s end — cleaning up budget and appropriations, some authorizations, including key parts of the USA PATRIOT Act, raising the debt ceiling, and passing measures such as an estate tax fix. Most are moving through the House on a reasonable timetable. But the Senate is wholly consumed with the health issue, each long day soaked up with delays and obstacles thrown out by the minority in order either to kill the bill or to delay it into next year. How can the Senate take time to do other things?

[IMGCAP(1)]I am watching the estate tax issue with particular attention. The Bush-era estate tax cut brought rates down gradually over 10 years and were designed to go to zero in 2010 — and then, to satisfy budget rules at the time of passage, back up to the full, pre-2001 level in 2011 (which was an exemption of $1 million for individuals, double for couples and a top rate of 55 percent).

That is not going to happen — Congress is on a path to keep the tax at about the current level, which is an exemption of $3.5 million for individuals and double for couples and a top rate of 45 percent. But imagine if Congress can’t finish the job by the year’s end, and lets it slip into late January or February. If that happens, expect to see a spike in top-of-the-new-year deaths caused by poisoned mushrooms or hunting accidents.

Health care reform aside, the top priority for Democrats in the White House and in Congress is jobs. Even if the unemployment rate has shown a promising decline, at 10 percent it is the most visible sign to Americans that the economy is not on track, and it is a major drag on the president’s approval and on Democrats’ chances to minimize losses in 2010.

The stimulus package was supposed to be a major jobs booster. It has helped significantly — we were in awful economic shape, and truly teetering at the abyss of deflation and depression; remember that the last depression brought us 25 percent unemployment — but nowhere near enough. One reason is that employers, even those doing well, remain skittish about the coming year or two. Rather than take on the risk and burden of new fires, even if their business would justify it, they are trying to make do with their existing work force or via temps. Job growth almost always lags behind economic growth in a recovery.

If we include those who have stopped looking for jobs, the actual level of unemployment is significantly higher than 10 percent. Helping people who are unemployed for reasons beyond their control is what America typically does; that means extending unemployment compensation and health benefits via COBRA. These are necessary but expensive propositions, and of course do not add new jobs to the rolls or even protect against existing jobs being eliminated or phased out.

So Congress and the president are throwing out many ideas to do the latter, constrained not by their imaginations but by politics and budget imperatives, and by the reality that government-driven measures to create private sector jobs, whether through tax credits or government programs, are not usually very efficient or provide much bang for the buck.

It is tricky to do so when the pressure to deal with looming budget deficits makes it very hard to spend more money; even if we faced the imminent threat of a double dip and a much more dire economic prospect, I doubt Congress could muster the votes for a second big stimulus plan. So Congress instead is eyeing the Troubled Asset Relief Program as its ready source of funds for jobs programs.

Let’s face it: TARP money was designed to save (all right, bail out) banks and other financial institutions whose failure could have precipitated true economic collapse. It was not for job creation, a safety net or other purposes. But if the money is there, Congress and the president will figure out a way to use at least some of it.

Despite the limitations, there are ways to do a lot more on the jobs front. One is to give grants to state and local governments, which are already facing their own budget crises (in part by their need to increase Medicaid spending in a recession) and under pressure to lay off state and local employees. The stimulus package actually did a lot to preserve the jobs of teachers, cops and others at the local level.

The idea out there that intrigues me the most is to create a win/win by focusing on green technologies, via a variation of the Green Bank that had wide bipartisan support in the House Energy and Commerce Committee and in the Senate Energy and Natural Resources panel. Crafted and championed by Rep. Chris Van Hollen (D-Md.) in the House and Energy Chairman Jeff Bingaman (D-N.M.) in the Senate, the Green Bank is a way to leverage public capital into serious private investment in enhancing energy development and conservation.

A Green Jobs Bank would require Congress to fund a one-time capitalization of $25 billion to $50 billion to make loans and loan guarantees to private companies — not, in the short run, to do cutting-edge technology, but to focus on bread-and-butter things such as energy conservation via retrofitting of buildings, conventional clean energy production and ramped-up manufacture of clean energy components such as wind turbines and solar panels.

Leverage is the key word — not so much giving grants (like “Cash for Caulkers,— appealing as it is) but using loans and loan guarantees to lower the cost of borrowing and get utilities to generate efficient electricity and insulate the buildings using it, to encourage construction and expansion of factories and other facilities to build needed components, and to spur generation projects.

The Green Jobs Bank would not be a government-run or government-controlled agency, but a lean and mean private, nonprofit entity, designed to be up and running quickly.

By focusing on existing technology and reliable electricity markets with steady returns, there is a real opportunity to create several million jobs over the next couple of years, and a lot of private investment — all having the added value of reducing energy use and carbon emissions. Not bad for a $25 billion investment that could well be returned to the Treasury over time.

Norman Ornstein is a resident scholar at the American Enterprise Institute.