Senate OKs jobs bill

$18 billion measure gives firms a break on Social Security taxes for new hires

March 18, 2010|By Ben Pershing | The Washington Post

WASHINGTON — — The Senate cleared an $18 billion jobs bill for President Barack Obama's signature Wednesday, a down payment on what Democrats hope will be a significant election-year investment in boosting the economy.

The measure passed 68-29, with 11 Republicans joining all but one Democrat present - Nebraska Sen. Ben Nelson - in support. The bill had passed the Senate once but the House tweaked it, requiring the second Senate vote before it could go to the White House. Obama has praised the legislation in the past and plans to sign it.

Though relatively small compared to last year's economic stimulus package, the measure represents the first clear legislative shot in months aimed squarely at persistent unemployment, and a rare bipartistan achievement from a Congress dogged by partisan squabbling. After getting bogged down in the health care debate, Democrats are eager to pivot to the economy, which polls regularly identify as Americans' most pressing concern.

"The beauty of this bill: It's simple, it's focused on private-sector job growth and it's paid for," said Sen. Charles Schumer, a New York Democrat and a co-author of the measure. "It's modest, but ... it's almost a legislative dream."

The centerpiece of the bill is a new program giving companies a break from paying Social Security taxes for the remainder of 2010 on any new workers they hire who had been unemployed for at least 60 days. Employers would also get a $1,000 tax credit for each of those workers who stays on the payroll for at least one year.

Aside from that program, the measure includes a one-year extension of the law governing federal transportation funding, and would transfer $20 billion into the highway trust fund. The bill also extends a tax break allowing companies to write off equipment purchases, and expands the Build America Bonds program, which helps state and local governments secure financing for infrastructure projects.

Some critics have questioned whether the package approved Wednesday is big enough to make a dent in the nation's persistent unemployment problem, arguing that the new payroll tax break is unlikely to spur much new hiring that wouldn't have otherwise occurred.

Separately, many Republicans suggest the bill uses accounting sleight of hand to make the measure appear budget-neutral.

"This isn't so much a jobs bill as it is a debt bill," complained Sen. Judd Gregg of New Hampshire.

Democrats counter that the measure will give employers a tangible and immediate incentive to add workers, citing studies suggesting that a payroll tax break could encourage the creation of hundreds of thousands of new jobs.

More importantly, Democrats at both ends of Pennsylvania Avenue vow that this is only the first part of their broader "jobs agenda." But beyond this first jobs measure, the way forward is murky.

Both chambers - the House in December, the Senate last week - have approved jobs packages in the neighborhood of $150 billion. But the two bills reflect starkly different priorities, making it difficult to craft a compromise.

Along with extensions of unemployment insurance and COBRA health benefits, the Senate measure includes a large package of extensions of tax breaks that are popular with the business community. The House bill, by contrast, omits the tax extensions and instead carries significant new spending for infrastructure projects as well as several billion dollars to help prevent state and local governments from laying off teachers, police and firefighters.

Many liberals in the House are contemptuous of the Senate bill's emphasis on tax breaks, and Congressional Black Caucus members have been particularly outspoken in calling for more targeted money for poor areas and the chronically unemployed. But Republicans and moderate Democrats in the Senate appear unlikely to back a compromise bill that includes the House's preferred priorities.

Beyond those conflicts, Democrats are battling the calendar, particularly in the Senate. The majority has found it difficult to get many measures passed in a timely fashion, accusing Republicans of obstructionism. GOP leaders have responded by complaining that Democrats regularly shut them out of the bill-crafting process and bar them from offering amendments.

Even the bill approved Wednesday, which is relatively small and uncontroversial, took more than six weeks to work its way through the system since it was first proposed.

Unemployment benefits for the long-term jobless are currently scheduled to expire April 5. If the House and Senate can't agree soon on a larger jobs package with a one-year extension of that program, the two chambers may have to approve another short-term renewal. The last such extension brought the Senate to a standstill, as Kentucky Republican Sen. Jim Bunning filibustered the bill because it added to the deficit.

Separately, both the House and Senate are working on measures designed to aid small businesses. The Ways and Means Committee on Wednesday is marking up a package that includes a wide variety of small business tax breaks, plus more funding for Build America Bonds and Recovery Zone Bonds. The Senate is crafting a small business lending bill that leaders hope to bring to the floor in the coming weeks.

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