Senate Dems to Propose Tax Credit for New Hires as Part of Smaller Jobs Bill

January 27, 2010 - 5:42 PM
President Barack Obama's allies in the Senate are acknowledging they can't pass an $83 billion jobs package. Instead, they're making plans to advance a small, first piece of his jobs agenda next month: a tax credit for new hires.
Washington (AP) - President Barack Obama's allies in the Senate acknowledge they can't pass an $83 billion jobs package. Instead, they're making plans to advance a small, first piece of his jobs agenda next month: a tax credit for new hires.
 
It's a bow to the political realities of a voting public that is increasingly worried about government spending. And the first initiative is aimed at winning over Republicans now that Democrats have lost their filibuster-proof majority.
 
The jobs tax credit would anchor a $15 billion to $30 billion measure that would be voted on next month, a senior Democratic aide said. It would also include tax breaks for small businesses and subsidies for infrastructure bonds issued by state and local governments.
 
At the same time, the idea of using leftover Wall Street bailout money to pay for the jobs agenda is fading fast, with key Democrats like Budget Committee Chairman Kent Conrad, D-N.D., now opposed to the switch. Dropping that move could reduce Republican opposition to a bite-size jobs measure.
 
Sen. Barbara Boxer, D-Calif., said it would be easier to sell the piecemeal approach to voters. "People understand it better than if you put 10 things in one bill," Boxer said.
 
Boxer's remarks indicate that a draft $83 billion package that leaked out this week is already dead, a point other Senate Democrats acknowledge privately.
 
The draft plan combined the jobs tax credit with $30 billion for infrastructure projects, more than $10 billion in energy efficiency subsidies for homeowners and businesses, and about $18 billion to help school districts pay teachers' salaries. But it was met with "sticker shock," the Democratic aide said.
 
The exact makeup of the first new, smaller measure is still under discussion, said the senior Senate Democratic aide, who spoke on condition of anonymity to discuss internal party strategy. The measure could be voted on as early as next week.
 
In taking a piece-by-piece approach, Senate Democrats are rejecting the all-in strategy taken last month by the House in passing an approximately $174 billion jobs measure. That measure passed by the barest of margins after Speaker Nancy Pelosi, D-Calif., had to convince about two dozen reluctant Democrats to vote for the debt-financed measure, and the Senate has not acted on it.
 
Pelosi is not a fan of the per-job tax credit idea, which was conspicuously left out of the House bill. She and other opponents worry that businesses would play games to claim the credit while not doing much to create jobs.
 
Also looming on the Senate agenda is safety-net legislation to again extend unemployment benefits and health insurance subsidies for the jobless. Temporary extensions expire Feb. 28.