How to Be Santa Claus

By GEORGE J. CHURCH

How to Be Santa Claus Congress rushes to pass jobs bills, however flawed

With 12 million or more Americans likely to be still unemployed at Christmas, a legislator who fails to vote for something or other that can be labeled a "jobs bill" is casting himself as Ebenezer Scrooge. Or so believe many Representatives and Senators who are scrambling to push supposed job-creating measures through the lameduck session of Congress that is scheduled to end this week, while simultaneously growling to themselves the equivalent of "bah, humbug!" A startling number confess to the deepest skepticism that any of the bills would actually create a significant number of jobs any time soon.

For the moment, however, such doubts are being publicly brushed aside. The tone of the session was set last week by House Speaker Tip O'Neill, who is making a remarkable comeback. O'Neill was so badly outmaneuvered by President Ronald Reagan in 1981 that Republicans openly laughed at him on the floor of the House, and not a few Democrats snickered behind his back. But the recession and the midterm election that transformed the nominal Democratic House majority into a real one have made his liberalism seem more relevant. O'Neill last week told some 240 House Democrats who had just unanimously nominated him for a fourth term as Speaker: "After two years of playing defense, we are going on the offense for jobs, jobs and more jobs."

With that as their keynote, legislators are steering toward votes four measures ranging from the probably worthwhile to the potentially disastrous. Ranked by their chances of becoming law, they are: 1) A bill to raise the federal gasoline tax 5-c-per gal. effective April 1 and use the estimated $5.5 billion a year in new revenues to repair highways, bridges and mass-transit systems. It passed the House last week by a resounding 262 to 143, but hit an unexpected snag in the Senate when three of that chamber's controlling Republicans began a filibuster. Senate Majority Leader Howard Baker predicts the bill will pass, but the measure may have to be watered down to make it more acceptable to truckers.

The bill is supposed to create 320,000 jobs. Few in Congress think it will, at least in time to be of any immediate help to victims of the recession. Dick Cheney of Wyoming, chairman of the House Republican Policy Committee, complains that the gas tax will take money out of the economy immediately, but highway projects, which are notoriously slow to start, will put people to work only gradually. Says Barber Conable, ranking Republican on the House Ways and Means Committee: "There's no way to get the money out quickly, short of shoveling it out of an airplane." Even some aides to O'Neill privately agree. Concedes one: "The money will be slow."

Wharton Econometric Forecasting Associates calculates that the bill might create a mere 40,000 jobs by the end of 1984, at the price of a 1.4% increase in the inflation rate by mid-1983. Why vote for it? For one thing, highway and bridge repairs are urgently needed, and they can be financed by the gas tax without swelling deficits. For another, even a slight gas tax raise will lead to some fuel conservation. But the real motive is pinpointed with rare candor by Democratic Senator Paul Tsongas of Massachusetts: "We're only doing this because we're desperate" to pass something that Congress and the White House can back as a jobs bill.

2) A bill proposed by O'Neill last Friday to spend an additional $5.4 billion on "light public works": painting government buildings, weatherizing poor people's homes, filling potholes. The Speaker's aides insist that the money can be pumped out within 90 to 120 days. Many Congressmen doubt that it can, or that the bill will create the targeted 300,000 jobs in any case. But, says California Democrat Leon Panetta, "based on symbolism alone, it will pass."

Or at least it will pass the House as an amendment to a "continuing resolution" providing funding for most of the Government. The Republican Senate is expected to defeat the bill this week, but the ensuing Senate-House conference may compromise by approving half the money, or $2.5 billion. Reagan, who sternly opposes "make-work" projects, is likely to veto the measure, thus stopping all Government funding and forcing Congress back into session Christmas week either to override his veto or to pass a stopgap spending bill without the public works money.

3) An omnibus bill drafted by Senate Democrats to combine the highway and public works programs and finance them not by raising the gasoline tax but by reducing the income tax cuts scheduled to go into effect July 1. This $17.9 billion plan will be offered as a substitute for the House Democrats' highway-gas tax program, and will be defeated, as its sponsors know perfectly well. Their aim is to tell constituents that they voted to create 650,000 jobs, a grossly inflated estimate.

4) A bill to require more "domestic content" in foreign cars sold in the U.S., as much as 90% American parts and labor in models recording 900,000 or more U.S. sales a year. The scheme could raise prices as much as $3,000 a car on makes such as Datsun and Toyota, and probably ignite a trade war that would wipe out many more jobs in American export industries than it would save in U.S. auto factories. The bill will probably pass the House but will be deservedly ignored in the Senate.

While Congress rushed to play Santa Claus, the Reagan Administration rehearsed for a very different role in the struggles over the fiscal 1984 budget that begin next month. Officials leaked a proposal to impose income taxes on the medical-insurance premiums above a certain limit that employers pay for their workers. The plan might raise $4.8 billion from 23 million taxpayers in 1984 if the tax-exempt limit were set at $1,800. Administration budgeteers also discussed ways to cut about $5 billion out of Medicare-Medicaid spending. One idea is to substitute set fee schedules for the current practice of reimbursing doctors and hospitals for all "reasonable, customary and prevailing" charges. Another is to limit Medicaid payments for mental health care.

Besides saving money, the proposals aim at curbing medical inflation, which is now spurred by a sky's-the-limit psychology among doctors and patients who rely on employers or the Government to pick up most of the bills. But these measures are sure to trigger fierce opposition. If Reagan actually puts forth these plans, he will set off a struggle that will make last week's scuffles over jobs bills look like the sham battles that several in fact were.

--By George J. Church. Reported by Evan Thomas/Washington

With reporting by Evan Thomas/Washington

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