Cited: Associated Press
On February 24, the Senate approves tax breaks for new hires with the help of Republican Scott Brown of Massachusetts and four other Republicans broke ranks to defeat a filibuster. This bill is the first of several job creation measures that the Democrats have promised.
Now companies that hire the unemployed would claim new tax breaks under a jobs-promoting bill the Senate passed every 24th, delivering President Barack Obama and Democrats a much-needed victory.
The 70-28 vote sends the bill back to the House, which passed a far more costly measure in December. Many in the House consider the Senate bill too puny, but they may simply adopt it and send it to Obama in order to get a win. Democratic leaders promise more so-called jobs bills are on the way.
It’s the first major bill to pass the Senate since the Christmas Eve passage of a deeply controversial health care bill and the subsequent election of Massachusetts Republican Scott Brown, which rocked Democrats by demonstrating their falling standing even among heavily Democratic voters.
The bill contains two major provisions. First, it would exempt businesses hiring the unemployed from the 6.2 percent Social Security payroll tax through December and give them an additional $1,000 credit if new workers stay on the job a full year. The Social Security trust funds would be reimbursed for the lost revenue.
Second, it would extend highway and mass transit programs through the end of the year and pump $20 billion into them in time for the spring construction season. The money would make up for lower-than-expected gasoline tax revenues.
The Senate’s $35 billion proposal is a far smaller measure than the $862 billion economic stimulus bill enacted a year ago.
The measure cleared a key hurdle February 22nd when Brown and four other Republicans broke party ranks to defeat a filibuster. Republican leaders said Majority Leader Harry Reid, D-Nev., had used strong-arm tactics to bring the measure to the floor.
In all, 13 Republicans voted for the measure February 24. Sen. Ben Nelson of Nebraska was the only Democrat in opposition.
Sen. Judd Gregg of New Hampshire, top Republican on the Senate Budget Committee, blasted the measure for increasing the budget deficit to fund highway and transit programs. He said the measure made a joke of Democratic promises to adhere to “pay-as-you-go” budget rules requiring new spending programs to not increase the deficit.
“I don’t think you get people back to work in this nation by loading more and more debt onto the next generation,” Gregg said.
The new hiring tax credit could spur about 250,000 new jobs, according to economist Mark Zandi of Moody’s Economy.com. The economy has shed 8.4 million jobs since the recession began in December, 2007.
Sen. Charles Schumer, D-N.Y., a sponsor of the hiring tax break, said it would have an immediate impact since businesses won’t have to apply for it when doing their taxes a year from now.
“It immediately takes effect,” Schumer said. “It goes right to small businesses.”
In addition to the hiring tax incentives and highway funding, the bill would extend a tax break for small businesses buying new equipment and modestly expand an initiative that helps state and local governments pay for infrastructure projects.
Republicans and some Democrats were unhappy that Reid brought the jobs bill to the floor after abruptly dumping about $70 billion worth of tax breaks for businesses and individuals, help for the unemployed and additional Medicare payments to doctors that had been introduced by Sens. Max Baucus, D-Mont., and Charles Grassley, R-Iowa, the chairman and senior Republican on the Finance Committee.
Most, if not all, of those ideas are expected to return in subsequent legislation.
“We’re just getting started,” said Baucus. “Our goal is to make sure that get bills passed that help people get more jobs. That’s what they want.”
For the unemployed doctors in the Medicare program expires on February 28, this is what Reid had dropped from the earlier jobs legislation. That means that before lawmakers can pass any legislation related to jobs the Senate will have to first approve a stopgap measure for the unemployed doctors.
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My Take: Everything I have heard so far says that this bill isn’t going to help much until people start buying more, which means employers won’t hire more. Sounds like a Catch-22 situation to me. People all over the country are trying to find jobs and can’t. Employers need to take a chance and start hiring people. They need to realize people need money to purchase things and if they don’t have a job they can’t purchase anything.
I know one industry that should be hiring people and that is the clothing industry. People need clothes for work and play, which means they’re always going to buy clothes. It doesn’t make any difference if they are stretch jeans for women or Greek apparel, they are going to buy. It’s even more important for people who work in construction to get Carhartt clothing because it is made for durability. It’s like firemen who need flame resistant clothing; they are going to buy it.
People are going to buy screen printed Greek shirts and lowrise jeans no matter how bad the economy is because they want them. That is why the clothing industry is the one industry that should be hiring.
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