House OKs tax breaks for employers making hires

WASHINGTON — Despite doubts among some lawmakers that it will create many jobs, the House on Thursday passed legislation giving companies that hire the jobless a temporary payroll-tax break.

The measure passed 217-201 on a mostly party-line vote. The bill also extends federal highway programs through the end of the year.

Some Democrats think the approximately $35 billion jobs bill is too puny, while others say the tax cut for new hires won't generate many new jobs. However, the pressure is on to address jobs and deliver a win for President Obama and a Democratic Party struggling in opinion polls and facing major losses in upcoming midterm elections. Further jobs measures are promised.

"If that's the only thing that I can vote on ... I'll vote for it, obviously," said Rep. Bill Pascrell, D-N.J. "We've got to get something done."

Thirty-five Democrats, mostly members of the Congressional Black Caucus, opposed the bill. Six Republicans voted in favor. In the Washington delegation, Democratic Rep. Brian Baird joined Republicans in voting against the measure, while the other Democrats voted for it.

The House had passed a much larger measure in December that contained almost $50 billion in infrastructure funding, $50 billion in help for state governments and a six-month extension of jobless aid. That bill left out the proposals to award tax credits for hiring new workers.

The Senate responded last week with the far smaller measure that the House is reluctantly accepting. The House amended the measure Thursday to conform with so-called pay-as-you-go budget rules. The rules require future spending increases or tax cuts to be paid for with either cuts to other programs or equivalent tax increases.

The minor tweak means the notoriously balky Senate would have to act again before Obama could sign the bill into law.

The $35 billion bill — blending $15 billion in tax cuts and subsidies for infrastructure bonds issued by local governments with the $20 billion in transportation money — is far smaller than the economic-stimulus bill enacted a year ago.

The jobs 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 Fund would be reimbursed for the lost revenue.

Second, it would extend highway and mass-transit programs through the end of the year and pump in $20 billion in time for the spring-construction season. The money would make up for lower-than-expected gasoline-tax revenues.

Small businesses would continue to be able to write off equipment purchases as a business expense. Much of the bill is financed by cracking down on offshore-tax havens.

The Senate is debating a far more costly measure to clean up a lot of unfinished business from last year. The $100 billion-plus bill would extend unemployment assistance, revive a bevy of expired tax breaks, help states with Medicaid costs and prevent doctors from having to absorb big cuts in Medicare payments. The popular initiatives are traditionally extended on a bipartisan basis for brief periods, which hides their long-term costs.

The Senate plans to act on the jobs bill after wrapping up the unfinished-business bill, which means it probably won't be sent to Obama until next week.