New Jobs Bills

Bipartisanship fleeting as jobs bill proposed
Democrats pare version forged with the GOP
Globe Wire Services / February 12, 2010

The jobs proposal
What’s in
▸Hiring tax credits - Exempts businesses hiring unemployed workers in 2010 from the 6.2 percent Social Security payroll tax for those hires and provides an additional $1,000 tax credit for workers retained for a full year. Cost: $13 billion.

▸Highway programs - Reauthorizes the highway trust fund to use gasoline taxes to help state and local governments pay for highway and transit projects. Deposits an additional $20 billion into the trust fund.

▸Equipment write-offs - Permits businesses to write off equipment purchases as a business expense.

▸Build America Bonds - Expands the Build America Bonds program, subsidizing interest costs for bonds issued by states and local governments for large infrastructure projects. Cost: $2 billion.

What’s out

▸Tax extenders - Extending through 2010 a variety of popular tax breaks that expired at the end of 2009, including a deduction for sales and property taxes and a business tax credit for research and development.

Cost: $31 billion.

▸Unemployment assistance - Extending through May 31 assistance for the long-term jobless and a 65 percent health insurance subsidy. Cost: $3 billion.

▸Medicare payments - Giving doctors a seven-month reprieve from a 21 percent cut in Medicare payments that would otherwise go into effect March 1. Extends other Medicare provisions. Cost: $10 billion.

▸Patriot Act - Extending for a year several provisions of the Patriot Act.

▸Farm aid - Help for farmers affected by heavy rains, floods, and other weather-related disasters.

Cost: about $1.5 billion.
The rapprochement lasted about four hours.

By evening, Senate majority leader Harry Reid of Nevada had a new bill and a renewed message. Instead of supporting a plan that some said was bloated with special interest money, Democratic leaders proposed a stripped-down version they contended was strictly focused on the number one priority for Americans: jobs.

Gone were provisions sought by several industries, including health care and biofuel, and supported by senators from both sides of the aisle.

Gone, too, was a spirit of bipartisanship. Senator Chuck Grassley, Republican of Iowa and Senator Max Baucus, Democrat of Montana, had earlier hailed the original draft as an essential two-party effort to respond to a troubled economy. “We believe they reflect a balanced set of member views and priorities,’’ the two senators said in a joint statement, which warned colleagues not to significantly alter the plan if they wanted bipartisan support.

The White House added, “The president is gratified to see the Senate moving forward in a bipartisan manner on steps to help put Americans back to work.’’

Yet, stung by criticism of several of the draft’s proposals, Democratic leaders balked. Their latest bill keeps several popular provisions, including a new tax break negotiated with Republicans for companies that hire unemployed workers and for small businesses that purchase new equipment. The bill also would renew highway programs and help states and local governments finance large infrastructure projects.

The bipartisan agreement is off. But Democrats said they now have a package focused solely on creating jobs, and they’re all but daring Republicans to vote against it.

“Our side isn’t sure that the Republicans are real interested in developing good policy and to move forward together,’’ said Senator Thomas Carper, Democrat of Delaware.

Said Reid: “Republicans are going to have to make a choice. I don’t know in logic what they could say to oppose this.’’

The original, bigger bill got a decidedly mixed reception at a raucous luncheon meeting of Democrats, many of whom were uncomfortable with supporting a measure containing so many provisions unrelated to creating jobs, including loans for chicken producers and aid to catfish farmers.

The centerpiece of Reid’s new bill is a $13 billion payroll tax credit for companies that hire unemployed workers. The idea, by Senators Chuck Schumer, Democrat of New York, and Orrin G. Hatch, Republican of Utah, would exempt businesses hiring unemployed workers this year from the 6.2 percent Social Security payroll tax for those hires.

It also would provide an additional $1,000 tax credit for workers retained for a full year and deposit an additional $20 billion into the federal highway trust fund - money that would have to be borrowed. There’s also $2 billion to subsidize bond issues by state and local governments for large infrastructure projects.

But Republicans are irate at the strong-arm tactics and said Reid had gone back on a deal reached with some of the Senate’s heaviest hitters, including minority leader Mitch McConnell of Kentucky.

“Needless to say, Senator Hatch is deeply disappointed that the majority leader has abandoned a genuine bipartisan compromise only hours after it was unveiled in favor of business-as-usual partisan gamesmanship,’’ said Antonia Ferrier, Hatch spokeswoman.