Senate Releases Jobs Bill With Criticism
After hearing the message loud and clear, that voters want Washington to focus on jobs, the Senate turned their attention from health care to, well… jobs.
In an effort to reach bipartisan consensus, the top Democrat and the top Republican on the Senate Finance Committee released the first in what is expected to be a series of proposals to create jobs.
Senator Max Baucus, Chair of the Finance Committee, said, “The main thing is we need jobs legislation passed for the American people.” Baucus said bipartisanship is important amidst political paralysis. “Really, they want us to look like we are working together, therefore we must work together so we can get something passed to help people get jobs.”
The jobs proposal costs $80 billion and is predominantly made up tax cuts for businesses.
The main provision is popular among members of both stripes. It would be a tax credit for employers to hire someone who has been unemployed for 60 days. The employer would be exempt from paying social security tax, which is 6.2% of a worker’s income under $106,800.
Other than tax breaks, it includes an expansion of unemployment insurance and health insurance benefits for the unemployed.
Some Democrats say an effort at bipartisanship might have gone too far.
Senator Tom Harkin (D-Iowa) said the bill offers a major disparity. Harkin said, “Why do you take all the tax breaks that benefit businesses and upper income… to the end of the year?” Unemployment insurance extensions only last for three months. Harkin said, “You gotta ask why.”
Perhaps it comes down to cost. According to the Senate Finance Committee analysis, the unemployment insurance extension is expected to cost $22 billion for three months. A full year’s worth of tax hiring incentives is expected to cost half that – $13 billion.
The draft bill also includes an extension of tax credits for green energy.
Senator Byron Dorgan (D-ND) says this provision is expected to create jobs, but many non-job creation programs have been included in the bill. “I would prefer a jobs bill that would focus on specific job creating initiatives. This bill has become something more than that, maybe that’s what you have to do to get bipartisan support,” Dorgan said. “Things get watered down some,” Dorgan said.
Senator Dorgan is referring to a measure to fix the estate tax, a controversial tax on property of the deceased that costs billions of dollars each year. It would also extend parts of the Patriot Act that are set to expire. The details of those provisions are not yet complete.
Ross Eisenbrey, Vice President of the liberal leaning Economic Policy Institute, said the jobs package is “too little, too late.” Eisenbrey said the hiring tax credit should offer 15% or 20% tax credits to “change [employers’] behavior.” He also said money should be given to states to prevent layoffs of state and local employees because of stressed budget.
This package is released one day after black leaders met with the President to urge direct employment assistance for African Americans, whose unemployment rate is 16.5%, nearly twice as high as whites. None of their ideas are included.
This proposal is a draft and could see dramatic changes through the amendment process on the Senate floor. It is also likely to be the first of several job bills proposed through out the year.
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