More on an interesting move….

Senate majority leader Harry Reid’s surprise revision of the jobs bill continues to be puzzling. It now appears that he even surprised the White House, who had just announced with some fanfare that they had a bipartisan jobs bill, and he certainly seems to have surprised most Democratic Senators, who are now scrambling to try to reassemble a bipartisan coalition around this revised bill.

He also seems to have surprised House majority leader Nancy Pelosi, who is clearly not happy that the new $15 billion Senate bill doesn’t have nearly as much in it as the $154 billion House bill she got passed. Her response to the proposed new Senate bill has been tepid at best, if not downright hostile.

Although his early remarks suggested this was just a political move on his part to trap Republicans into an unpopular vote ahead of the November elections, subsequent remarks suggest a more reasonable approach – he may have decided it was just too big a piece to bite off at one time in the present political climate (probably true), and that the original bill was simply too bloated with pork, earmarks, and unrelated issues (certainly true). If that was his real motive, then his move was quite sensible, though why he chose to surprised everyone, including his own party and the White House, is still puzzling.

Of course, there is still the question of whether the new bill does anything useful. The centerpiece of the new slimmed-down bill is $13 billion in 1-year payroll tax breaks for employers who hire people previously unemployed and receiving unemployment insurance. It’s not clear that really produces any new jobs. Employers will hire more people only when they think there is enough new business to justify the new hire – a payroll tax break on a new hire a business doesn’t need isn’t going to be enough to motivate them to hire people they don’t need. So in fact about the only people who will be helped are businesses who were going to hire new people anyway.