Given the failure of Obama’s jobs bill in the Senate last night, Democrats are already looking for a Plan B — a smaller jobs package that’s actually politically feasible. Sen. Chuck Schumer (D-N.Y.) is developing a proposal that would pair the creation of a national infrastructure bank — an idea popular among Democrats — with a tax repatriation holiday that allow corporations to bring profits held overseas back home at a major tax discount — which many Republicans support. A few economists who back further infrastructure spending but are skeptical of the repatriation holiday believe that Schumer’s compromise could be worth pushing for. But those on both sides warn of the risks of pairing the two ideas.

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Dean Baker, co-director for the liberal Center for Economic Policy Research, is even more skeptical of the repatriation tax holiday, which he deems as a “really bad idea” that will have “zero” positive impact on investment. Supporters of repatriation — a temporary tax holiday for corporations that was tried in 2004 — argue that it could bring some $1 trillion back to the US, boosting the economy and spurring job creation. But critics like Baker point to studies showing that the 2004 repatriation holiday did little to spur investment or hiring by the firms who took advantage of it. “These companies are already sitting on buckets of money, why do we think they would invest more if we they had even more money to sit on?” Baker says.

Nevertheless, Baker said that he would be willing to support Schumer’s idea if the infrastructure spending end of it were big and bold enough. “I would go for the deal if the infrastructure bank involved real money that involved an actual increase in spending. In other words there has to be a substantial amount of money in the deal for infrastructure,” he says. But Baker adds that he’s very concerned that infrastructure spending would get the short end of the stick. “So unless the bank is attached to real money, then absolutely no deal.”

However, some conservative economists on the other side of this debate — who support the tax repatriation holiday but not the infrastructure bank — say that Schumer’s nascent idea is unacceptable. Doug Holtz-Eakin, former CBO director and adviser to McCain’s 2008 campaign, supports the push for a repatriation tax holiday but says linking it to an infrastructure is unacceptable — and could even hurt the chances for good legislation to get passed. Holtz-Eakin calls repatriation “one policy proposal that gets support from left and right and actually might happen,” noting that even Howard Dean — the liberal firebrand-cum-lobbyist — has supported the idea. He argues that the studies debunking the merits of repatriation weren’t comprehensive enough to account for its benefits. “That money didn’t go into black hole — it went to somebody, and they did something with it,” he says. “It’s hard to imagine a trillion [in repatriated profits] wouldn’t have an impact.”

That being said, Holtz-Eakin rejects the idea of linking repatriation to an infrastructure bank, arguing that it would have no bipartisan appeal while repatriation could have enough support in Congress to pass on its own. “To drag that into the equation, it would reduce the chance of [repatriation] getting through. In terms of both the politics and substance, it goes in the wrong direction.”

There is a glimmer of hope among Republicans for Schumer’s idea: Sen. Mark Kirk (R-Il.) has endorsed it. “Common sense is if you lower the tax rate below the rate in Argentina, China or Japan, then it makes sense for those employers to bring those profits home,” Kirk said, according to Politico. “And that can help fund more infrastructure development.” But it will still be a hard sell in the political environment — particularly on the right, but also on the left.

In fact, there are economists who support infrastructure spending who are skeptical about both parts of Schumer’s proposal. “I am lukewarm whether an infrastructure bank is the right way to achieve that policy. The notion that we’re going to do for infrastructure what Fannie and Freddie did for housing is not a particularly enticing prospect. I’m very cold about idea of ‘financing’ this with a repatriation holiday,” says Bill Gale, a Brookings fellow and co-director of the Tax Policy Center. “It’s hard enough to come up with policies with a sustainable impact — the notion that we have to dilute them with politically charged pay-offs is a sad commentary on our politics.”

Jared Bernstein, former economic adviser to Vice President Biden, feels similarly. “I don’t like this idea. I’m all for the i-bank, but to capitalize this way would be a Pyrrhic victory, based on all the distortions caused by the repatriation holiday.”

Both sides agree that if Congress passes anything to stimulate economy, it will probably be even more modest. Both Holtz-Eakin and liberal economists agree that extending the payroll tax cut and unemployment insurance before both expire would provide some marginal help — but not much else. “The biggest argument in favor of it is that it’s happened before,” says Holtz-Eakin. “I don’t think it’s going to make a big difference.”