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Speaker Resists Reid Jobs Plan

Leaders Disagree on Strategy

Senate Majority Leader Harry Reid’s (D-Nev.) plan to move multiple jobs bills through his chamber this year has met some powerful resistance: Speaker Nancy Pelosi (D-Calif.), who fears the strategy will end up leaving many Democratic priorities on the cutting room floor.

Pelosi told Reid as much last week when the Majority Leader outlined the Senate’s plan to pursue a series of bills aimed at job creation rather than one massive package, sources said. Reid has decided to first pursue bipartisan agreement on a targeted package of tax cuts, a move the Speaker believes could result in little, if any, funding for new infrastructure projects and civil service jobs for teachers and firefighters.

In a meeting with Reid on Tuesday, Pelosi urged the Majority Leader to include more spending for highway and infrastructure projects in his first bill, one Democratic source said. Reid responded that he would make an attempt to do so, but he did not make any firm promises, the source said.

Senate Democratic aides have acknowledged that some of the Senate’s jobs bills are likely to be filibustered by Republicans, particularly those that involve the kinds of direct spending programs included in the $154 billion measure the House passed in December. But Senate Democrats have said they would rather pass a handful of job creation bills than see one large package fail at a time when they are trying to reclaim the public confidence in their ability to turn around the economy.

“We can only pass what we can pass,” said one senior Senate Democratic aide. “There are political realities. We have people over here who don’t want to pass a … $120 billion bill.”

The aide said pushing a larger measure would only result in “a Pyrrhic victory” that would allow Democrats to beat up on Republicans but would not “help people get back to work. If we could do it all in one shot, we would.”

One senior House Democratic aide said Pelosi’s position “depends on what is in the bill. We are not saying anything until we know more.”

Before Senate Democrats lost the Massachusetts Senate special election on Jan. 19 — and with it, their filibuster-proof majority — Senate Majority Whip Dick Durbin (D-Ill.) and Democratic Policy Committee Chairman Byron Dorgan (N.D.) had been working on a more-than-$80-billion jobs package, which would have included direct spending on infrastructure and civil service jobs along with a handful of targeted tax cuts. But with Senate Democrats newly unable to block a GOP filibuster, Reid shifted course to a multi-bill strategy that would incorporate many of the elements Durbin and Dorgan identified.

Pelosi was concerned that the Senate was not continuing to pursue that bill, sources indicated.

After being lobbied by Senate Finance Chairman Max Baucus to pursue a package of tax cuts before any spending programs, Reid relented but refused to give the Montana Democrat the months he asked for to mark up a bill. Instead, Reid plans to bring legislation to the floor before Senators leave for the Presidents Day recess at the end of next week.

Baucus on Tuesday said he was working “assiduously, aggressively” to put a package together.

“We’re trying to get something as quickly as we can and not take unnecessary time or delays to put it together and have it on the floor,” Baucus said.

Still, Dorgan said the process was “taking longer than we had hoped or expected.” He explained, “This is a big, diverse caucus and people have a lot of ideas some people have some territorial issues.”

But on Tuesday Reid vowed, “We are going to do something on jobs this work period.” Reid said he had identified most of the components of the bill, which includes a one-year extension of the highway trust fund, small-business expensing tax credits, a continuation of the Build America Bonds program, and some version of a tax credit for businesses that hire new employees.

Reid said the Congressional Budget Office has determined that all four components of the bill “will create jobs immediately in the year 2010.”

He also indicated that the new hire tax credit would likely come in the form of “a bipartisan effort” by Sens. Charles Schumer (D-N.Y.) and Orrin Hatch (R-Utah), both members of Finance. That proposal would suspend some payroll taxes for businesses that hire people who have been unemployed for two months or more.

While Hatch did not rule out supporting the bill if it comes to the floor quickly, other Republicans said they were wary of moving too fast.

“I think to bring [up] a jobs tax credit that fast would be a major mistake,” said Sen. Mike Enzi (R-Wyo.), who also serves on Finance. “It’s something that really ought to be worked out and worked out in a bipartisan way. The only way he can bring it to floor that fast is for him to draft it and him to take it to the floor, and we’ve been there before. … Why do we want to do everything comprehensive? If you keep it simple, you keep it small, you can get it done.”

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