Companies that hire unemployed workers get a temporary payroll tax holiday under a bill headed for likely Senate passage Wednesday.
A positive vote would send the legislation to the White House for President Barack Obama’s signature.
It would be the first of several election-year jobs bills promised by Democrats to be enacted into law, though there’s plenty of skepticism that the measure will do much to boost hiring.
The bill contains about $18 billion in tax breaks and a $20 billion infusion of cash into highway and transit programs. It would exempt businesses that hire the unemployed from paying the 6.2 percent Social Security payroll tax through December and give employers an additional $1,000 credit if new workers stay on the job a full year. Taxpayers would reimburse Social Security for the lost revenue.
It would also extend highway and mass transit programs through the end of the year and pump 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.
Obama has promised to sign the measure into law.
In addition to the hiring tax incentives and highway funding, the bill would extend a tax break for small businesses buying new equipment and modestly expand an initiative that helps state and local governments finance infrastructure projects.
A far larger measure that would extend health insurance subsidies and jobless checks for the unemployed is in the works but has hit slow going. That measure has passed both House and Senate but is hung up as the rival chambers wrangle over how to partially finance the legislation, which also would extend a variety of tax breaks for individuals and businesses.
As a result, it may require a third temporary extension of unemployment benefits, which would otherwise expire at the end of this month.
The Senate vote also comes as a House panel is to vote on a new bill designed to help small businesses. That bill would exempt long-term investments in certain small businesses from capital gains taxes and would expand a program that subsidizes interest costs paid by local governments when they borrow for construction projects.
Source: The Associated Press.