WASHINGTON — Companies that hire unemployed workers will get a temporary payroll tax holiday under a bill that easily won congressional approval Wednesday in what Democrats hope is just the first of several election-year measures aimed at boosting hiring.
The 68-29 vote in the Senate sent the legislation to the White House, where President Barack Obama was expected to sign it into law today. Eleven Republicans voted for the legislation, an impressive tally considering the politically charged atmosphere on Capitol Hill.
Washington state Sens. Maria Cantwell and Patty Murray voted for the bill
It was the first of several jobs bills promised by Democrats, though there’s plenty of skepticism that the measure will do much to actually create jobs. Optimistic estimates predict the tax break could generate perhaps 250,000 jobs through the end of the year, but that would be a small fraction of the 8.4 million jobs lost since the start of the recession.
The bill contains about $18 billion in tax breaks and a $20 billion infusion of cash into highway and transit programs.
Among other things, it exempts businesses that hire people who have been unemployed for at least 60 days from paying the 6.2 percent Social Security payroll tax through December and gives employers an additional $1,000 credit if new workers stay on the job a full year. Taxpayers will have to reimburse Social Security for the lost revenue.
It also extends highway and mass transit programs through the end of the year and pumps in $20 billion in time for the spring construction season. That money would make up for lower-than-expected gasoline tax revenues.
The measure is modest compared with last year’s $862 billion economic stimulus bill, and the bulk of the hiring tax breaks would probably go to companies that were likely to hire new workers anyway.
The bill is financed in part over the coming decade by cracking down on offshore tax havens, though it would add $13 billion to the debt in the coming three years.
The Senate vote came as the House Ways and Means Committee approved a bill that lawmakers hope will generate jobs through infrastructure spending and tax cuts for investing in some small businesses. The bill would exempt long-term investments in certain small businesses from capital gains taxes, and would expand the Build America Bonds program, which subsidizes interest costs paid by local governments when they borrow for construction projects.
The bond program would be extended through June 2013, at a cost of $7.6 billion. The entire bill would cost about $17 billion over the next decade.
Much of the bill would be paid for by limiting the ability of multinational corporations to avoid U.S. withholding taxes by shifting assets among foreign countries. The bill would also make it easier for the federal government to withhold payments from government contractors that owe back taxes.
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