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Jobs bill coming, Senate leaders say

Pledge to launch bipartisan effort to enact measure

By Stephen Ohlemacher
Associated Press / February 5, 2010

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WASHINGTON - Senate leaders plan to pass a jobs bill next week featuring tax breaks for employers that hire unemployed workers in what could be a rare bipartisan effort in a Congress sharply divided along political lines.

“We want to work with the Republicans and it appears to me, on the jobs program, they want to work with us,’’ said the Senate’s majority leader, Harry Reid, a Nevada Democrat. “We do believe very emphatically that we will be having a bipartisan bill.’’

The Senate will start work on the bill Monday, Reid said. If the bill is passed by the end of next week, when the Senate takes a Presidents’ Day break, it would hand President Obama a badly needed political victory.

Passage of a bipartisan bill would contrast sharply with the way Congress has done business for the past year, reflecting the Democrats’ diminished power since Republican Scott Brown scored a stunning victory last month in a special Senate election in Massachusetts. With Brown having been seated yesterday, Senate Democrats no longer have a filibuster-proof majority, meaning they need at least some Republican support to pass legislation.

Democrats believe a jobs bill that includes tax breaks Republicans support is a good way to break the ice, while also reflecting Obama’s renewed emphasis on creating jobs.

Also, lawmakers worried about reelection in the midst of double-digit unemployment want to be seen as helping the 7 million Americans who have lost their jobs in the recession.

“We heard the message of Massachusetts,’’ said Senator Charles Schumer, Democrat from New York. “They said focus immediately - and don’t take your focus off - jobs, the economy, helping the middle class.’’

In addition to the tax break for hiring unemployed workers, the bill under discussion would extend unemployment payments for those whose benefits have run out and would renew a program that offers the jobless a subsidy for health insurance premiums under the COBRA program.

About $33 billion in popular tax breaks that expired at the end of 2009, including an income tax deduction for sales and property taxes and a business tax credit for research and development, would be extended through this year.

Reid has said he also wants to extend at least three programs for another year: funding for the highway trust fund; tax breaks for small businesses that buy new equipment; and a bond program to help state and local governments pay for infrastructure projects.

The tax break for hiring unemployed workers would exempt companies from paying the employer’s share of Social Security payroll taxes for new workers hired this year, as long as those people had been unemployed at least 60 days. It would save companies 6.2 percent of the new workers’ salaries that are subject to Social Security taxes. It would cost the government about $11 billion over 10 years.

The measure is modeled after a proposal by Schumer and Senator Orrin Hatch, a Utah Republican. It is an alternative to Obama’s proposed tax cut of up to $5,000 for each new worker that employers hire.

Supporters said the Senate plan is cheaper, simpler, and less vulnerable to abuse than Obama’s plan, which would cost $33 billion.