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If We’re Serious about Jobs, Don’t Stop Job Creation

NEC Director Lawrence Summers explains how a partisan minority in Congress has put up to 100,000 jobs in jeopardy, and what can be done about it.

Today, the Temporary Assistance to Needy Families (TANF) Emergency Contingency Fund will expire because a minority in Congress blocked the extension proposed by the President. This will put up to 100,000 jobs in jeopardy, raising unemployment and potentially even cost the government more money in additional public assistance funds. A strong commitment that the program will be restored when Congress returns could still save some of these jobs, and provide crucial help to workers, businesses and communities.

The TANF Emergency Contingency Fund lets states use Recovery Act dollars to help employers pay for the cost of hiring low-income unemployed workers. Since the inception of the program, states have provided jobs to more than 250,000 jobless parents and disadvantaged youth according to a recent analysis. In September alone, up to 100,000 Americans were employed in subsidized jobs funded through the Emergency Fund - jobs that are in jeopardy given the expiration of this successful initiative. We certainly shouldn’t let effective programs expire, especially when they’re still very much needed to help these low-income workers earn the paychecks they need to support their families.

Small businesses are hiring many of the workers supported by this program and these businesses have been able to grow as a result. A recent New York Times story highlighted an innovative program in Mississippi that used the funding to pay private companies to hire 3,200 workers and paid their salaries on a sliding scale so that the employers would end up paying the entire amount after six months. As a local employer recently told the Los Angeles Times, “It’s a win-win. We needed the help and they needed the jobs.”

Without federal funding, most states and localities won’t be able to continue to provide support for these jobs. 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.

We should all support effective job creation programs. I hope Republicans will join with Democrats in Congress to renew funding for the Emergency Contingency Fund and provide businesses a chance to hire and the neediest Americans an opportunity to work.

Lawrence H. Summers is Director of the National Economic Council