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Senate Democrats unveil job-creation package

The first step will likely be a tax incentive to employers who hire new workers. Other details and the price tag remain vague.

February 04, 2010|By James Oliphant

Reporting from Washington — Eager to show Americans that they are focused on reversing widespread unemployment, Senate Democrats on Thursday unveiled a package of legislation dedicated to spurring job growth.

"Our No. 1 emphasis is going to be on creating jobs," said Senate Majority Leader Harry Reid (D-Nev.).

But the political question hovering over the newfound push is whether it comes too late to quell growing voter dissatisfaction with how Democrats are handling the economy.

Ironically, the announcement of a job-creation package came on the same day that Scott Brown, the winner of a special election last month in Massachusetts, is set to be sworn in as a new Republican senator. Brown is to be sworn in at 5 p.m. EST.

That election was widely viewed by Democrats and Republicans as a referendum on the Obama administration and the Democrats' stewardship of Congress. Today, Sen. Charles E. Schumer (D-N.Y.) said his party was paying attention.

"We heard the message of Massachusetts," Schumer said. "They said, 'Focus immediately and don't take your focus off jobs.'"

In the short term, the victim of the Democratic pivot is likely to be the controversial healthcare overhaul, which has been shelved indefinitely as House and Senate leaders attempt to figure out a way forward.

Brown's arrival means that Republicans have regained the ability to filibuster any bill they choose, meaning that Democrats will be forced either to radically redraw the legislation to attract GOP support or ram through a slightly altered version of the current bill using a process known as reconciliation, a procedural step that requires only a simple majority in the Senate.

The Democratic jobs plan initially will involve extending a tax incentive to employers to reward them for hiring new workers. The details of the credit are expected to be finalized in the coming days by Sen. Max Baucus, chairman of the Senate Finance Committee, but a bipartisan proposal offered by Schumer and Sen. Orrin Hatch (R- Utah) is under consideration.

The Schumer-Hatch plan would refund the 6.2% share of the Social Security payroll tax to companies of any size that hire workers this year.

While Reid said Thursday that he hoped to have a vote on a tax-credit bill as early as next week, it remained unclear whether the measure would draw significant GOP support.

"It appears to me that on a jobs program, they want to work with us," Reid said.

Details of the full Democratic plan remained vague, however, and Senate leaders refused to say how much the overall program might cost. But components of the agenda are likely to include some tax relief and loan assistance for small businesses, increased investment in highway infrastructure projects, a bond program to help state and local governments borrow money and another extension of unemployment insurance and COBRA benefits.

But nobody is calling the plan a second stimulus. With congressional elections looming in the fall, Senate Democrats are leery of passing a large package with a massive price tag attached. Instead, Reid said that the effort will be moved in pieces over the coming weeks and months. A $154-billion jobs bill passed by the House in December appears to be a non-starter in the Senate.

And although it remains possible that Republicans will join Democrats to pass some form of tax relief, it's likely they will balk at any measure that involves increased government spending, even if the funds come out of money recovered from bailed-out financial institutions through repayments to the Troubled Assets Relief Program.

joliphant@tribune.com

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