WASHINGTON — Businesses have hired 5.6 million workers under a new program that provides tax breaks for hiring unemployed workers, the Treasury Department said today.
The report, however, does not estimate how many of those jobs would have been added without the tax break.
President Barack Obama signed a law in March that exempts businesses hiring people who have been unemployed for at least 60 days from paying the 6.2 percent Social Security payroll tax through December. Employers get an additional $1,000 credit if new workers stay on the job a full year.
Treasury released a report today estimating that from February through June, businesses hired 5.6 million workers who qualify for the tax breaks. That’s up from the 4.5 million workers who were hired under the program through May.
Those businesses are projected to save $10.4 billion in taxes, if they keep three-fourths of the new workers for at least a year, the Treasury report said.
Many businesses also cut jobs during the period, though there was a net increase of about 868,000 jobs from February through June, according to the government’s business payroll survey. The economy shed 125,000 jobs in June, according to the survey.
At the start of the year, congressional Democrats said the new law would be the first of many initiatives designed to create jobs. Other measures, however, have stalled amid partisan bickering.
“The HIRE Act gives employers in states across the country an incentive to hire new workers as soon as possible because the payroll tax exemption expires at the end of 2010,” said Assistant Treasury Secretary Alan B. Krueger.
Sen. Charles Schumer, D-N.Y., has proposed extending the tax cut for an additional six months. Schumer appeared with Krueger and other lawmakers at an event Monday in Albany, N.Y., to promote the tax credit.
“This tax cut has proven to be a timely, targeted and effective job creator,” Schumer said in a statement. “It’s time we extended it for six more months so more middle-class Americans can find work.”
Economists have said there is no way to know how many of the unemployed workers would have been hired without the tax credit.
Online:
www.ustreas.gov/press/releases/tg804.htm
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