US Senate Lawmakers Debut Long-Awaited Jobs Bill

Lawmakers in the Senate released a long-awaited $87 billion bipartisan jobs bill Thursday that relies on business tax breaks and construction projects to bring down the unemployment rate.

Senate Democrats had hoped to pass the bill this week but have been delayed by a record-setting snowstorm that has paralyzed Washington for days. With no votes scheduled for Thursday and a weeklong recess looming, action on the bill is not likely until Feb. 22.

Though there has been little bipartisanship in an often-gridlocked Congress this session, the bill has drawn support from at least two Republican senators, Charles Grassley and Orrin Hatch, as both parties agree action is needed to bring down the 9.7 percent unemployment rate.

In a joint statement, Grassley and Democratic Senator Max Baucus said the bill was only a draft that could change significantly.

"We offer it as the first step in the Senate process for consideration of these time-sensitive proposals," the two lawmakers said.

Despite strong backing from the two top lawmakers on the tax-writing Finance Committee, the bill could face resistance from both the left and the right.



Republican Senator Judd Gregg has blasted as wasteful a provision that would add $19.5 billion to a fund that helps state and local governments pay for highway construction, and his staff released a memo suggesting that he could use budget rules to strip it out of the bill.

Lost Tax Revenue

Meanwhile, many liberals question the effectiveness of one of the elements supported by Republicans: a tax credit for businesses that hire people who have been unemployed for at least 60 days.

That approach would cost between $56,000 and $125,000 in lost tax revenue for every full-time job created, according to the nonpartisan Congressional Budget Office.

The bill differs significantly from a $155 billion jobs bill passed in December by the more liberal House that emphasizes construction spending and aid to cash-strapped states.

Democrats hope to bring down the unemployment rate before the November congressional elections, but they also face a growing voter backlash for the hundreds of billions of dollars in deficit spending approved last year to blunt the impact of the worst recession in 70 years.

Democrats in the Senate also no longer enjoy a supermajority after a surprise Republican victory in the Massachusetts Senate race last month.

The Senate bill relies heavily on tax breaks that would cost the government $79 billion in lost revenue over 10 years.

The entire bill's $125 billion cost would be offset by $38 billion in new tax revenue from paper mills and offshore tax havens.

Unrelated elements such as an extension of the anti-terrorist Patriot Act and a move to stave off scheduled cuts in Medicare reimbursement rates also drive up the tab.
Copyright 2010 Reuters.