Wrangling Over Jobs Legislation Dominates Washington Agenda

In recent days, the U.S. Senate has turned its attention towards finding a path forward for a bill intended to boost job creation in the face of rising unemployment rates that are frustrating voters and causing angst among politicians.

The legislation now faces an uncertain future after a bipartisan-negotiated packaged was scrapped in favor of a smaller, more-targeted bill.

As part of an effort to refocus his presidency following months of battles over health care reform, Barack Obama used his State of the Union address and subsequent public events to tout the jobs bill as his top priority for 2010.

TAX INCENTIVES OUTLINED

His outline for the legislation called for tax incentives to encourage businesses to create jobs or increase wages, tax breaks for small businesses, increased infrastructure spending, and other measures to increase hiring.

However, with Senate Democrats losing their 60-vote supermajority following the election of Massachusetts Republican Scott Brown (R-Mass.), any jobs legislation now faces the same difficulties in the Senate that seem to have doomed health care reform. At least one Republican vote is needed to pass any bill through the Senate, a tough task in an increasingly polarized Washington.

TOTAL COST:$31 BILLION

Yet, on Feb. 11, Senators Max Baucus (DMont.) and Charles Grassley (R-Iowa) unveiled a bipartisan $85 billion jobs package that included many of the president’s priorities but added an extension of unemployment insurance and COBRA health care benefits as well as seemingly unrelated measures, such as the continuation of some Patriot Act provisions and a seven-month extension of Medicare physician reimbursement rates referred to as the “doc-fix.”

The Baucus-Grassley bill also would extend several expiring business tax credits, including the research and development credit, at a total cost of $31 billion.

The White House quickly praised the bipartisan effort. “The President is gratified to see the Senate moving forward in a bipartisan manner on steps to help put Americans back to work,” White House press secretary Robert Gibbs said in a statement. “The American people want to see Washington put aside partisan differences and make progress on jobs.”

SMALLER BILL CONSIDERED

But, according to reports by the Washington Post and others, some Senate Democrats felt that certain measures – especially the “doc-fix” and business tax credits – would do little to create jobs.

Just hours after the legislation was introduced, Senate Majority Leader Harry Reid (D-NV) announced that the Senate would not move forward with the Baucus-Grassley bill and instead would consider a smaller, $15 billion jobs bill.

The main element of the smaller bill would exempt companies from paying Social Security taxes for the remainder of 2010 on every new worker who had been unemployed for at least 60 days.

Other measures included in the bill are new transportation infrastructure spending, expanded investment breaks for small businesses and funding to help local governments pay for new schools, courthouses and other public projects. Reid claimed that he would consider moving forward other measures from the Baucus-Grassley bill as separate bills.

“This is a simplified, focused bill that addresses our core priority: putting millions of Americans back to work,” Reid said in a statement:

“Each piece of this bill enjoys bipartisan support, and I look forward to swift action on this measure that will create and save dependable jobs.”

MOVE RAISED CONCERNS

The quick move away from the Baucus-Grassley bill has raised concerns about whether Reid will be able to attract the Republican votes needed to pass the bill. In an interview with the Associate Press, Sen. Orrin Hatch (R-Utah), one of the negotiators of the bipartisan bill, said “I personally believe that every Republican would have to vote against [moving the bill forward].” They would do so to protest Reid’s decision to scrap the broader bipartisan bill, which could have passed the Senate easily, Hatch told the AP.

RESPONSE WAS TEPID

The measure also received a tepid response from Speaker of the House Nancy Pelosi. In December, the House of Representatives passed a $174 billion jobs package, paid for with remaining TARP bailout funds, which focused more on additional spending than on tax breaks. The bill included $27 billion in aid to the states and did not contain a tax-incentive for hiring.

In a statement on the unveiling of Sen. Reid’s job package, Pelosi made it clear that she prefers the House’s legislation, stating, “We will work to ensure that critical pieces of the House-passed Jobs for Main Street Act are enacted into law — including investments in our roads, bridges, and public transit systems, support for job training

initiatives, and funding to keep police and firefighters on the streets and teachers in the classroom.”

Additionally, none of the jobs measures being discussed would target minority communities, which are suffering from higher than average unemployment. Many Hispanic leaders have called for additional aid for Hispanic-Americans, who face an unemployment rate of 12.6%

LA RAZA ENCOURAGED

In a statement issued the day after the release of the Senate jobs bill, National Council of La Raza President and CEO Janet Murguía said, “We are encouraged that Congress is heeding the president’s call to focus on jobs. However, we will not accept more of the same from Congress. A lack of will in Washington to bring real job opportunities to our communities fails to convince Latino workers that Congress is fighting for them.”

Reid has set Feb 22 as the target date for a vote on the stripped-down Senate jobs bill.