By BAIRD HELGESON and KEVIN DIAZ, Star Tribune

Last update: February 22, 2010 - 4:48 PM

Feeling growing pressure to create more
jobs, Republican and Democratic leaders
from the State Capitol to Washington are
battling over new steps to stimulate the
economy.

Both sides are gravitating to measures aimed
at helping Main Street, not Wall Street -- still
the focus of voter wrath over last year's
bailouts. The consensus mostly ends there.

In Washington this week, Senate Democratic
Leader Harry Reid of Nevada hopes to push
through a $15 billion package focused on tax
credits and subsidies for local transportation
and infrastructure projects.

It falls far short of a broader, $85 billion bill
that was once thought to have GOP support.

Meanwhile, the DFL-controlled Minnesota
Legislature is readying a $1.1 billion
borrowing bill that could come to a vote as
early as Monday. The money would be used
for construction and repair projects and is
projected to create roughly 21,000 jobs.

Minnesota Republicans are lining up behind
Gov. Tim Pawlenty's pitch for lower
corporate taxes and investor credits that he s
ays could save businesses $20 million over
17 months, and more in coming years.

While the politicians battle, small-business
owners such as Scott Mendrum say they are
running out of time and patience.

Mendrum is hanging on to his eight-person
garage door company in Brooklyn Park, but
he's getting half the business he had in 2005.
Tax cuts would be good, he said, and the last
round of federal stimulus spending helped,
but "it didn't help enough."

15 million, and counting

Government gets pressure to help battered
workers and businesses in every recession.

But the stakes are particularly high now. Not
only is this downturn the worst in more than
25 years, and maybe the worst since the Great Depression, its effects could be
especially long-lasting.

Already, 6.3 million Americans have been out
of work for more than six months, the most
since the government began counting in
1948. The overall number of jobless has
topped 15 million, and economists know that
the actual number is higher since only those
still actively looking for work are counted.

Sectors of the economy that have typically
been among the first to pull out of recession
-- autos, home construction and banking --
have been among the hardest hit this time
around. With the economy needing to add
100,000 jobs a month just to keep the
number of jobless from growing, even a
vigorous recovery could take years to bring
enough jobs to make up for those lost since
2007.

Those statistics would seem to argue for a
continued effort by the federal and state
governments to boost jobs, and 13 states
have passed their version of a stimulus bill in
the past year, according to the National
Conference of State Legislatures.

Some experts say the idea of states trying to
spend their way to economic recovery
carries more political than economic weight.

"It benefits industry and construction, which
are always the first to bounce back in a
recession anyway," said Bill Frenzel, a former
Republican U.S. congressman from
Minnesota and a guest scholar of economic
policy at the Brookings Institution.

Minnesota's modest plan

Other than spending bills, Democrats in the
Legislature have offered little else to goose
the economy. And they scoff at Pawlenty's
pitch for tax cuts.

They cite studies that show there's no
guarantee that tax breaks translate into new
jobs or fresh investments in Minnesota
companies.

"Will it be reinvested actually in the company,
or will it be a bonus to the CEO?" asked state
Sen. David Tomassoni, DFL-Chisholm. "When
you are saying to the disabled person or the
handicapped person they can't have the
services they actually need so you can give a
tax break to a rich company, it just doesn't
add up."

Pawlenty hasn't offered any idea how many
jobs would be created by the proposal,
which he dubbed the "Job Creation Bill."

"We're not out here trying to do a jobs
created or saved based on this or that," said
Brian McClung, the governor's deputy chief
of staff. McClung said economists or
economic historians could figure out
whether tax cuts or state spending best
create jobs.

The proposals by both sides in Minnesota
pale in comparison to those in other states.
Illinois has launched a six-year, $31 billion
spending program expected to create or
support more than 439,000 jobs.
Mississippi, led by Republican Gov. Haley
Barbour, may spend up to $43 million in
direct wage reimbursements to employers
who make new hires. Other states such as
Florida and Tennessee are also testing plans
to slice off a share of their federal welfare
money for wage subsidies of new jobs.

Lesson from Washington

As Minnesota lawmakers remain divided,
those on Capitol Hill seem to have found one
patch of common ground at a sprawling
industrial low-rise in Faribault, Minn.

There, McQuay International's Applied Air
Systems is using $1.3 million in new federal
tax credits to revamp a manufacturing plant to make more energy efficient air-
conditioners.

Republicans like the tax breaks; Democrats
like the green energy.

By retooling its Faribault plant, the
Minneapolis-based conglomerate is being
included among 183 new manufacturing
projects in 43 states that qualify for $2.3
billion in clean technology tax credits that
were part of the stimulus package.

Designed to spur investment in renewable
energy and conservation, the so-called
Advanced Energy Manufacturing Tax Credits
are touted as one of the undisputed
successes of the stimulus package -- and
one that serves to bridge the partisan divide
in Washington.

For McQuay, the tax credits mean ramping up
for a better business climate, and the jobs
that might come with it-- if not now, then in
the future.

Now, with the Obama administration still
searching for ways to tamp down
unemployment rates hovering near 10
percent, private sector tax breaks similar to
those extended to McQu