'Cash for Jobs': Franken wants to use TARP funds to put Minnesotans back to work
Today, U.S. Sen. Al Franken (D-Minn.) introduced his plan to put around 15,000 Minnesotans back to work. The "Strengthening Our Economy Through Employment and Development (SEED) Act," informally known as "Cash for Jobs," would take $10 billion in existing funds from the Troubled Asset Relief Program (TARP) and re-allocate it to creating jobs in the private and public sectors. This means the initiative would create jobs without adding to the national debt or deficit.
Sen. Franken's 'Cash for Jobs' plan is based on a successful 1983-1987 Minnesota program, the Minnesota Emergency Employment Development program, that got 7,400 workers back on the job in its first six months. Franken's bill provides $5 billion for wage subsidies to incentivize hiring in the private sector. The additional $5 billion will provide direct grants to states, local governments, and tribes to create green jobs.
"As our country continues to face double-digit unemployment rates, and Minnesotans struggle looking for work, Congress must enact legislation that quickly and efficiently creates jobs," said Sen. Franken. "Cash for Jobs will rapidly create jobs in the private and public sector, encourage the expansion of small and medium-sized businesses, and increase the energy efficiency of public buildings. It will boost the economy where we need it most - on Main Street."
The SEED Act will reallocate $10 billion from TARP to fund its programs and has the potential to rapidly create up to 500,000 jobs in an efficient way and at a lower cost per job than other proposals. These new jobs will stimulate our economy, increase tax revenue, and decrease the burden on social benefit programs (such as unemployment insurance, COBRA subsidies, and food stamps). Jobs created by the SEED Act will be easy to track, and are administered though an existing infrastructure.
The SEED Act was developed in collaboration with the JOBS NOW Coalition (Minnesota), Minnesota AFL-CIO, HIRED (Minnesota), Affirmative Options Coalition (Minnesota), and the Minnesota Workforce Council Association.
Private Sector Job Creation: Wage Subsidies
· The SEED job creation wage subsidy is based on a successful model used in Minnesota from 1983 to 1987, where it got 7,400 workers back on the job in its first six months.
· The job creation wage subsidy would provide the capital that many businesses and organizations need to grow their workforce and expand their operations.
· Small and medium-sized non-profit and private sector employers would be eligible for a job creation wage subsidy administered through local Workforce Investment Act (WIA) One-Stop Career Centers.
· The One-Stop Career Centers would grant the subsidies to eligible employers on a first-come, first serve basis to incentivize rapid job creation.
· The job creation subsidy would be available for 50 percent of wages, up to a $12 per hour subsidy.
· Employers that hire veterans who have returned from Iraq and Afghanistan would be eligible for an enhanced job creation wage subsidy of 60 percent.
· Employers would be eligible for the job creation subsidy for 12 months.
· The job creation subsidy would be paid directly to participating employers twice per month through their Workforce Service Area for the first nine months, and the subsidy for the 10th, 11th and 12th months would be paid in a lump sum at the end of the 15th month upon certification that the worker was retained.
Public Sector Job Creation: Green Jobs
· The SEED Act would create jobs to retrofit hundreds of public buildings, putting people back to work, increasing energy efficiency, and significantly reducing our dependence on foreign oil.
· The SEED energy efficiency promotion fund would make grants available to states, localities, and tribes to hire workers to retrofit public housing, public buildings, schools and libraries to increase energy efficiency.
· Any workers hired under the SEED Act would be paid prevailing wages.
· States, localities, and tribes employing outside contractors would use a bidding process.
· If funds are not obligated within one year of enactment of the SEED Act, the funds would be transferred to the Public-Private Partnership Job Creation Wage Subsidy fund.