Support the House of Representatives??? Job Creation and Education Provisions in the American Recovery and Reinvestment Act

Media 02.10.09

Recipient: U.S. Congress

Dear Member of Congress:

On behalf of the Leadership Conference on Civil Rights (LCCR), the nation’s oldest, largest, and most diverse civil and human rights coalition, with nearly 200 member organizations, we are writing to urge the H.R. 1 conferees and Congress to focus on job creation and hew to the principles of the House of Representatives’ version of the American Recovery and Reinvestment Act (ARRA).

We are pleased that the Senate was able to pass a version of the ARRA, that its version comes close to the House version in overall cost, and that it does include several new and substantial investments in education, particularly Title I and IDEA. However, it is clear that the Senate version has missed several opportunities to capitalize on the job creation potential of the House version that must be recaptured in the final bill.

We urge the conferees to reconcile the ARRA at an overall figure within the range of the existing bills by returning to the House model and restoring direct spending on education, state budget stabilization, construction and infrastructure, health and nutrition programs, energy efficiency, and other programs with immediate employment and positive social impacts. Funding to restore those programs can and should come from existing tax cuts in the Senate bill, which are widely viewed by economists and the Congressional Budget Office (CBO) as having far lower stimulative value.

Economists from across the political spectrum, as well as business forecasters and the CBO, agree that the House version of the ARRA will create or save between 430,000 and 538,000 more jobs:

  • CBO low assumption estimate: 430,000 more jobs

  • Moody’s 441,000 more jobs

  • CBO high assumption estimate: 538,000 more jobs

Economists also agree that direct spending that creates or saves jobs is a much better way to stimulate the economy than tax cuts, especially when such cuts are targeted at middle and upper income people who are far less likely to spend the money. The CBO, in an analysis prepared for Senator Gregg, the Republican nominee for Secretary of Commerce, examined a range of economic models to compare the effects of the Senate bill’s tax cuts versus the House bill’s spending provisions. The CBO projected a “multiplier effect” for each dollar expended and found that direct federal spending on goods and services and aid to states to support their budget needs and infrastructure spending is five to ten times as powerful at stimulating the economy as tax cuts like the alternative minimum tax patch.

Government spending works because it employs people, both in the public sector, like teachers, and in the private sector, like the construction workers who build and repair schools, bridges, and mass transit systems, and weatherize homes. The CBO estimates that every dollar spent on a job for an American worker can inject as much as $2.50 into the economy, as that worker re-spends the money on food and other goods that have to be made and sold, in turn helping to employ more people.

We also urge Congress to maintain its focus on the long-term value of the jobs that can be saved and created by the House version of the bill. In education, for example, classroom jobs and construction jobs have both the immediate CBO economic stimulative effect, as well as powerful long term effects. By improving education, we equip the next generation of workers to compete in the global economy. This is as true for high school students graduating next year who take an extra Advanced Placement course from a teacher who would have been laid off without this funding; as it is for kindergartners starting next year in a school that has been rebuilt, rewired for broadband, equipped with computers, and insulated from the cold with this funding.

Despite these benefits, the final Senate bill decreased the House’s funding from the education cradle to the grave, beginning with Head Start and finishing with higher education:

  • Head Start: $1 billion

  • Stabilization Fund: $40 billion

  • K-12 school construction: $14 billion

  • Higher Ed construction: $6 billion

  • Construction bonds: $12 billion

The $40 billion cuts to the State Stabilization Fund alone includes $15 billion of dedicated K-12 funding and $25 billion of more flexible state aid that would be administered by the Department of Education and could be used for education or other state services or public safety needs. Though the difference in the funds accounts for only five percent of the cost of the entire bill, adopting the House version of the State Stabilization Fund would have enormous economic impact:

  • Stabilization Fund: 182,000 more jobs

It is also important to note that the majority of the jobs saved or created by the House version of the Stabilization Fund would belong to women. Women make up nearly 60 percent of the state and local workforce. Even using their overall percentage, without attempting to adjust for the even higher percentage of women in education, it is likely that the House version of the Stabilization Fund would save or create 108,000 jobs for women.

In school construction, renovation, and modernization, where “shovel ready” jobs would be created, primarily in the private sector, the House bill set a standard that the Senate bill completely ignored. There is an overwhelming and immediate need for the House’s $20 billion in education construction funding that school districts and higher education facilities around the country could put to immediate and productive use. The House was also careful to provide for $25 billion in school construction bonds to help ensure that the private businesses that will be the engines of long-term economic growth will be able to bid on and secure the capital necessary to do the work. Unlike the Senate bill, which may not create any school construction jobs because it only provides some bond funds without any construction funds at all, the House bill will have tremendous economic impact:

  • Construction funding: 104,000 more jobs

We urge the conferees and Congress to maintain the House bill’s focus on job creation and to quickly finish work on and pass the ARRA. We thank you for considering our views. If you have any questions, please contact David Goldberg, Senior Counsel, at (202) 466-0087 or [email protected], or Nancy Zirkin, at (202) 263-2880 or [email protected], regarding this or any issue.


Wade Henderson, President & CEO
Nancy Zirkin, Executive Vice President