The U.S. Senate approved on Feb. 24, 2010, a $15 billion jobs bill that had been pared down to garner bipartisan support. The legislation passed by a vote of 70-28 with 13 Republican senators joining the Democrats to support an effort to revive the lagging U.S. job market.
The Senate rolled the Jobs for Main Street Act (H.R. 2847) into an appropriations bill for the Department of Commerce and included several tax incentive packages for businesses that hire new employees. The proposal includes a new program that would exempt employers that hire unemployed workers from paying Social Security taxes on the new hires for the remainder of 2010. The proposal would offer employers an additional $1,000 tax credit for any new hire who stays on the job for one year.
The Senate-approved version was scaled back from an original $80 billion jobs proposal pushed by the Obama administration. Democratic leaders removed several provisions from the bill, including extensions for a popular COBRA subsidy and unemployment benefits, while retaining key proposals that had the support of GOP senators. Senate Majority Leader Harry Reid, D-Nev., told reporters after the bill passed that it was the first installment of what would become a multi-element jobs agenda.
In passing the bill, the Senate waived the “pay-as-you-go” budget rules adopted only three weeks earlier. The budget rules require that any new programs approved by Congress must be fully funded and not add to the ballooning federal deficit. According to cost estimates, some highway and transportation provisions included in the jobs legislation could increase the federal deficit by $12 billion over the next five years.
Sen. Judd Greg, R-N.H., the ranking minority member of the Senate Budget Committee, criticized the jobs bill for deficit increases, saying that the measure made mockery of the Democrats’ promise to stick to the pay-as-you-go rules.
“I don't think you get people back to work in this nation by loading more and more debt onto the next generation,” Gregg told reporters after the measure passed.
According to several economic projections, the tax credits for new hires could generate a quarter-million new jobs nationwide. The latest statistics show that the U.S. economy has lost nearly 8.5 million jobs since the start of the recession in late 2007.
Critics of the jobs measure stated that it would do little to revive the nation’s stagnant labor market, while supporters of the bill said that the Senate’s action was a step in the right direction.
“It immediately takes effect, and it goes right to small businesses,” said Sen. Charles Schumer, D-N.Y., a key sponsor of the legislation.
The legislation now must gain approval from the House of Representatives, and it is unclear when the House might consider the jobs proposal. President Barack Obama has indicated that he would sign the bill into law once it passes both houses of Congress.
Bill Leonard is a senior writer for SHRM.