House OKs $15 billion jobs bill

Measure gives employers a temporary break in payroll taxes for each employee hired this year

March 05, 2010|By James Oliphant | Tribune Newspapers

WASHINGTON — — The White House will have to wait a little longer to cross off the first item on its job-creation agenda.

The House of Representatives Thursday passed a $15 billion bill aimed at jump-starting hiring nationwide, but because the bill had been modified to ensure passage, it must now return to the Senate for another vote. The Senate passed a previous version of the bill last week.

The bill would grant employers an exemption from their 6.2 percent Social Security payroll contribution for every new employee hired through the rest of the year, so long as that employee had been out of work for at least 60 days. It would also make it easier for businesses to write off equipment purchases and would extend federal highway and mass-transit funding programs.

Congress is expected to vote on a series of job-creation measures in the coming weeks and months. The Senate is debating a $137 billion package of industry-friendly tax breaks and benefit extensions with an eye toward voting on that bill next week.

The bill passed 217-201, on close to a party-line vote despite opposition from the Congressional Black Caucus, whose members said it would do little in the inner cities. House Speaker Nancy Pelosi, D-Calif., and Democratic leaders sought votes from centrist Blue Dog Democrats by adding provisions that would ensure the bill is paid for by corporate tax revenue.

"I know that some people have some concerns, on one side of the aisle or the other, about this provision or that provision," Pelosi said before the vote, "but the fact is that a million jobs will be created by this legislation."

The House passed a more sweeping bill in December, only to see it declared dead on arrival by Senate Majority Leader Harry Reid, who decided to adopt a more incremental approach. Reid's decision caused hard feelings among House Democrats, but Pelosi has agreed to go along.

Republicans derided the payroll tax exemption as a gimmick, and economic experts are divided on whether the exemption will spur hiring. Some believe an uptick in hiring is more likely to be fueled by an increased demand for goods and services.

Several lawmakers in both parties criticized the payroll tax break, saying that it wouldn't do much to create jobs and that the bulk of it would go to employers for new hires that would be made anyway.

Rep. Steve LaTourette, R- Ohio, said he asked businessmen at town meetings in his Rust Belt district whether they would hire based on the payroll tax holiday. "Nobody raised their hands," LaTourette said.

Rep. Jim McGovern, D-Mass., said the bill was bettter than nothing. "We're going to have to do more. But the bill that I would have liked to have seen pass can't pass the United States Senate."

Economist Mark Zandi of Moody's said the new hiring tax credit could spur creation of about 250,000 new jobs. The economy has shed 8.4 million jobs since December 2007.

The Associated Press contributed to this article.

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