TANF EF thumb

Job-Creating Stimulus Program Comes to an End, Auguring Thousands of Layoffs

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Thursday, September 30, 2010 at 4:33 pm

Workers protest for the extension of the TANF Emergency Fund. (Flickr/Jobs With Justice)

Thirteen years ago, Lee Bush started his own small business, National Collection Systems, a waste management service based in Jackson, Miss. “Times are tough, and they were especially tough when the market turned down,” Bush says. “It’s hard to get loans to fund the business. We got more efficient. And we had to downsize. We had an in-house mechanic, and we had to let him go.”

[Economy1] But the business could not afford to shrink any further. “It takes a certain amount of labor to pick up trash and garbage. We have temps we use, but we weren’t getting the kind of capacity contracts or funds that would necessitate us growing,” he explains. One night, though, when Bush was watching television, he heard an advertisement for a Mississippi program that would help businesses pay for the cost of hiring new workers. It was called the Mississippi Subsidized Transitional Employment Program, or STEPS.

The funds for STEPS came from the Feb. 2009 American Recovery and Reinvestment Act, the stimulus bill. And when the program was launched, none other than Mississippi Gov. Haley Barbour (R) — a fierce critic of the stimulus, who rejected billions in funding for the state — started singing the program’s praises. “Mississippi STEPS is unique in that it is a program specifically designed to benefit both the employee and employer,” he said in 2009, adding that the program would feed “the economic engines of our local communities.”

“We were figuring out how to get someone to get us more business, a developer, but we couldn’t afford to hire then,” Bush says. “I saw the ad for the program, announcing there were funds available. I called around, I asked, and we were the first in the whole state to sign up.”

Soon after, Bush hired that business developer. “He goes out and contacts construction and demolition sites, and residential pick-up sites,” Bush explains. And he’s good at it. STEPS paid 100 percent of his salary for the first two months, then less and less for another four. Now, he brings in enough business to pay for himself, and Bush has made him permanent.

“STEPS — that program pushed us to hire. And now we have nine employees,” Bush says.

It is a stimulus success story: Federal funding targeted to a small business led to a previously unemployed worker finding a permanent job. The worker is better off, and so is the business. But as of midnight tonight, the federal program that once funded Bush’s worker is gone.

At midnight on Sept. 30, the TANF Emergency Contingency Fund (TEF) — considered one of the most successful stimulus programs, having created 250,000 jobs for previously unemployed workers — expires. The Obama administration and Democrats had requested $1.5 to $2.5 billion to keep it going for another year. The House has passed two extenders, but yesterday, legislation failed again in the Senate. That means employers are now faced with laying off the TEF workers, as many as 100,000, into an economy that already has 14.9 million unemployed.

“Without federal funding, most states and localities won’t be able to continue to provide support for these jobs,” Larry Summers, the director of the White House’s National Economic Council, said in a statement today. “Governors from both parties have called for the extension of the program and some will try to keep it going for a couple of months with state funds, buying Congress time to act. But the reality is that many states will be unable to fill the gap, and those that can, only temporarily. A commitment to extending this program will give more governors the confidence not to end it now and could save up to 100,000 jobs.”

The program did not need to end in this way. Senate Democrats tried numerous times to extend the legislation — in provisions moved in March and blocked by Sen. Judd Gregg (R-N.H.), and in versions of the tax extenders legislation. This week, Sen. Dick Durbin (D-Ill.) tried to move a three-month extension, to give Democrats some time to work a fuller fix for the program into another bill. Sen. Mike Enzi (R-Wyo.) objected to Durbin’s unanimous consent request, killing it on the grounds that it expands the welfare state and costs too much.

TEF’s end has led to howls from progressive think-tanks, Republican and Democratic governors and the thousands of businesses and hundreds of thousands of workers the program has aided.

The Center on Budget and Policy Priorities, for instance, looked at the programs states created — 36 of them, plus a program in Washington D.C. — and summarized their achievements. One county in Tennessee brought its unemployment rate from 27.3 to 18.6 percent in just eight months. North Dakota helped create jobs for parents without the means to pay their child support. South Carolina targeted parents who would otherwise collect welfare. Alabama aided job-sapped rural areas. CBPP’s analysts described ending the fund as “walking away from a win-win-win.”

Congress could attempt to recreate or reauthorize the program later, though Congressional aides say that chances are slim. That leaves states to try to fund their own programs, despite the fact that many are facing yawning fiscal gaps and service cutbacks.

In Illinois, for instance, Gov. Pat Quinn (D) has extended the program with state funding for two months. “One of the best ways to help the most people is a j-o-b,” he said this week. “It’s the best way to fight crime. It’s the best way to fight poverty. It’s the best way to keep families together.”

He continued, “We cannot afford to lose momentum as we continue our economic recovery. Quick action by Congress will keep thousands of people at work in Illinois and will continue to build on the progress we have already made.”

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Comment posted September 30, 2010 @ 9:37 pm

Well the lawmakers may just wake up to a rude awakening the day after elections. Some of them may just find themselves unemployed. They better get in their final vacations, breaks, etc.. that are paid for by the American Citizens, cause it may just be their last. I don't feel sorry for them. They dug their own grave, now it is time for them to slip on that old banana peel. They are not caring about the American public in general. They are all about themselves, and high corporate brass. But I think they are nearing their day of reckoning. And I for one will not be there to help them get up. I have had it with all the bull hockey they have shoved down our throats for years. There needs to be a change. They again are leaving hard working Americans in the lurch again, not caring a damn about them. A Tier 5 is definately needed at this time, and stimulus money needs to get out there to help people. Stop wasting my money for a war I did not ask for, immigrants that get all these little perks like free health care, when I cannot even get any myself. Lets keep all this money here in the USA, and take care of our people first. Charity begins at home. Once we have cleaned up our house, then we can help with other homes.


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[...] the prolific Annie Lowrey of The Washington Independent: At midnight on Sept. 30, the TANF Emergency Contingency Fund (TEF) — considered one of the most [...]


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Trackback posted October 4, 2010 @ 4:59 pm

Tens Of Thousands Of Progressives Rally At The Lincoln Memorial For Jobs, Justice And Education…

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Trackback posted October 4, 2010 @ 6:07 pm

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Trackback posted October 5, 2010 @ 3:34 am

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Trackback posted October 5, 2010 @ 6:22 pm

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Comment posted October 7, 2010 @ 2:11 pm

Google in the input: www. tradeone.us you can find many brand names, even more surprising is that he will sell you the unexpected o(?_?)o


Angelo_Frank
Comment posted October 12, 2010 @ 1:08 pm

This is pathetic. We have a President, on the eve of mid-term elections, tossing out yet another proposed infrastructure jobs plan (http://www.mcclatchydc.com/2010/10/11/101902/obama-pushes-infrastructure-plan.html), that will go nowhere, out to the voters. The voters, of all political persuasions, have just about had it up to their necks with all the promises of change from Obama and a do-nothing, corrupt congress, that places party over country. We are 11.5 million jobs short of pre-recession levels, Social Security recipients will see no COLA raise in 2011, ridiculously low interest rates for savings deposits, and Wall Street is setting yet another record for bonuses. The voters, especially senior citizens living on fixed incomes, are justifiably angry and will take it out at the ballot box November 2nd.


Charles
Comment posted October 19, 2010 @ 2:48 am

The statement, “That means employers are now faced with laying off the TEF workers, as many as 100,000, into an economy that already has 14.9 million unemployed,” says it all.

What's needed is a stimulus program that fuels growth in the private sector, which will unleash new job creation. Not another government program that will only provide temporary support.

The problem: the huge federal deficit is putting a lid on stimulus that might boost the private sector, leaving the Fed to do the heavy lifting.

That said, US may be in a no-win situation. Recessions brought on by high interest rates abate when rates come down. Recessions that spring from an economic crisis are much more difficult to deal with. We may be stuck with high unemployment for a while.


HP board’s selection of new CEO raises new doubts North Capitol Street
Pingback posted October 24, 2010 @ 8:32 pm

[...] Job-Creating Stimulus Program Comes to an End, Auguring Thousands … [...]


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Pingback posted October 25, 2010 @ 6:18 am

[...] Job-Creating Stimulus Program Comes to an End, Auguring Thousands … [...]


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Pingback posted October 26, 2010 @ 1:50 pm

[...] Job-Creating Stimulus Program Comes to an End, Auguring Thousands … [...]


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Pingback posted October 29, 2010 @ 9:47 am

[...] Job-Creating Stimulus Program Comes to an End, Auguring Thousands … [...]


$700B TARP bailout ends Sunday, will wind up costing $100B or less North Capitol Street
Pingback posted November 2, 2010 @ 8:49 am

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Pingback posted November 2, 2010 @ 8:52 pm

[...] Job-Creating Stimulus Program Comes to an End, Auguring Thousands … [...]


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Pingback posted November 2, 2010 @ 8:52 pm

[...] Job-Creating Stimulus Program Comes to an End, Auguring Thousands … [...]


Gingrich endorses Rangel challenger North Capitol Street
Pingback posted November 4, 2010 @ 11:19 pm

[...] Job-Creating Stimulus Program Comes to an End, Auguring Thousands … [...]


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Pingback posted November 4, 2010 @ 11:47 pm

[...] Job-Creating Stimulus Program Comes to an End, Auguring Thousands … [...]


Sen. Thune defends TARP vote North Capitol Street
Pingback posted November 11, 2010 @ 5:51 pm

[...] Job-Creating Stimulus Program Comes to an End, Auguring Thousands … [...]


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