House Adopts $15 Billion Plan to Spur Job Creation

Published: March 4, 2010, New York Times

WASHINGTON — The House on Thursday approved a $15 billion measure intended to spur job creation by granting tax breaks to businesses that hire workers, as Democrats, bracing for new jobless figures, tried to show that Congress was doing something about stubborn unemployment.

Democrats pushed through the measure on a mainly party-line vote of 217 to 201. They characterized the measure, which also funneled an extra $20 billion into road and bridge construction, as just the first step in a broad legislative push to bolster the economy and encourage hiring.

Representative Bob Etheridge, Democrat of North Carolina, said the bill was “really all about our three most important priorities in this Congress: jobs, jobs, jobs.” He estimated that the measure could create one million jobs.

Though the measure attracted bipartisan support when approved by the Senate last week, House Republicans were dismissive, saying it was cobbled together by Democrats for political purposes and would do little to spur new employment. And many Democrats, even though they backed the measure, considered it far too limited in scope.

Just 6 Republicans joined 211 Democrats in backing the measure; 166 Republicans and 35 Democrats were opposed.

“This is a no-jobs bill, this is a faux-jobs bill, this is a snow-jobs bill,” Representative Steven C. LaTourette, Republican of Ohio, said.

Democrats in the House and Senate are eager to score some victories on job-related legislation even as they continue to be preoccupied with the fate of their health care overhaul. The bill passed by the House, which also extends the federal highway program and provides federal subsidies for public works bonds, was scaled back from a much larger measure in the Senate in an effort to speed it through.

But even advancing the narrower measure has vexed Democrats. Senate Democrats had hoped the House would simply pass its measure so it would land on President Obama’s desk before a new jobless report on Friday.

But House Democrats wanted several changes. They adjusted the bill to cover its costs more completely, to satisfy Democratic fiscal hawks. To attract liberal lawmakers who contended the measure was too meager, they added a provision to generate business for minority contractors. The revisions mean the measure will have to be reconsidered by the Senate, where it was unclear whether Republicans would seek to slow its progress.

The centerpiece of the legislation is a plan to exempt businesses that hire people who have been out of work for at least 60 days from paying the 6.2 percent payroll tax on those employees through year-end. It also grants a $1,000 tax credit if the workers are kept on for a full year.

Opinion is divided on whether the approach is effective or simply gives businesses a break on workers they would have hired anyway. But lawmakers said that given the dismal unemployment picture, they were willing to give it a try, and estimated the tax breaks would put 300,000 people to work.

That was not enough for some Democrats. “We should stop calling it a jobs bill, and instead acknowledge this is about business tax cuts,” said Representative Barbara Lee, a California Democrat and chairwoman of the Congressional Black Caucus. She voted against the bill and said much more needed to be done to reach the chronically unemployed.

In bolstering and extending the federal highway fund through the end of the year, lawmakers hoped to encourage state and local governments to move ahead with projects that provide good-paying jobs and bring some stability to a federal program that was shut down temporarily this week in a Senate fight over unemployment benefits.

“It will save hundreds of thousands of jobs,” said Representative Earl Blumenauer, Democrat of Oregon, about the transportation financing. “It will incite economic activity.”

House members were upset over a Senate transportation provision that they said funneled too much money to California, Louisiana, Washington and Illinois; they extracted a promise from Senator Harry Reid of Nevada, the majority leader, to correct the allocation in a later bill.

Democrats had intended to focus on job-creating measures this year but that plan has been disrupted by the continuing fight over the health care overhaul.

As the health negotiations continue, the Senate is moving forward on a $150 billion package of business tax breaks and safety net programs that it hopes to approve next week. Democrats say they will next turn to providing more help for small businesses and aid to states.