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Posted at 06:12 PM ET, 11/16/2011

Congress gives final approval to first pieces of Obama jobs bill

The House has agreed to extend tax credits to businesses that hire unemployed veterans and to repeal a tax provision that would have burdened government contractors, the first modest elements of President Obama’s $447 billion jobs package to receive Congressional approval.

The measure, approved last week by the Senate, passed by an overwhelming unanimous 422 to 0 vote. It now heads to President Obama, who has indicated he plans to sign the bill into law.

“No veteran who fought for our country should have to fight for a job when they come home.  That’s why I proposed these tax credits back in August, and I look forward to signing them into law. This is a good first step, but it is only a step. Congress needs to pass the rest of my American Jobs Act so that we can create jobs and put money in the pockets of the middle class,” Obama said in a statement.

Both parties cheered the vote as a rare example of legislative cooperation to address the nation’s most pressing issue.

But the bipartisan spirit was limited.

Democrats said Republicans should follow the vote by accepting other more significant pieces of Obama’s package, including new infrastructure spending, aid for states to hire teachers and first responders, extension of benefits for the unemployed and a payroll tax holiday for workers.

“That same spirit that has resulted in being able to fix and improve this legislation ought to be focused on how we rebuild and renew America,” said Rep. Earl Blumenauer (D-Ore.).

Republicans countered that proposals approved Wednesday had been GOP ideas and that Democrats who control the Senate should take up a series of measures that have been approved by the House to reduce regulations and repeal the federal health care law, which they say could create jobs.

“I call on the president and Democrats in the Senate to take up these bills, let the Senate speak, let the American people speak, because I believe all 20 of these bills passed the House with bipartisan support, and they can pass the United States Senate,” House Speaker John A. Boehner (R-Ohio) told reporters Tuesday.

Eleven House members did not vote on the measure. They included Rep. Gabrielle Giffords (D-Ariz.), absent as she recovers from her injuries from a January shooting, and Republican presidential candidates Reps Michele Bachmann (R-Minn.) and Ron Paul (R-Tex.).

Other members who did not vote on the bill were: John J. Duncan Jr. (R-Tenn.), Cory Gardner (R-Colo.), Ralph M. Hall (R-Tex.), Marcy Kaptur (D-Ohio), Bill Posey (R-Fla.), Dennis A. Ross (R-Fla.), Jean Schmidt (R-Ohio) and John Shimkus (R-Ill.).

The rare bipartisan action was also largely overshadowed by a continued impasse on the special deficit reduction supercommittee, whose members are stuck on an ideological divide over taxes and entitlement reforms, with just days to go before a Nov. 23 deadline.

A supercommittee failure could make the adoption of more significant parts of Obama’s jobs package that have some bipartisan backing more difficult.

Aides have said the committee has discussed rolling some pieces of the president’s plan into the supercommittee’s broad recommendations--notably a $175 billion proposal to extend a payroll tax holiday that is set to expire at the end of the year, resulting in a $1,000 a tax hike for the average family next year.

Without a supercommittee plan on table, the fate of the payroll tax holiday was unclear. Congress could take up the issue separately in December, but building building a coalition to get it approved, particularly amid the political firestorm that would result from a supercommittee flameout, would be tricky.

The bill approved Wednesday was a collection of more modest jobs ideas advanced by Obama and members of Congress in both parties.

It includes a package of benefits to help military servicemembers transition more easily to the civilian workforce.

It will also offer businesses a new tax credit of as much as $9,000 if they hire a disabled veteran who had been out of work for more than six months, a $5,600 credit for hiring any veteran unemployed for at least six months and $2,400 for hiring a veteran out of work for at least a month.

And it repeals a rule slated to go into effect in 2013 that would have required government agencies to withhold 3 percent of payments to private vendors.

Congress decided in 2005 that the payments should be withheld to ensure government contractors pay their taxes. Businesses were to get a refund a tax time if it they owed less than 3 percent of their payment.

But implementation of the withholding rule had been delayed twice already amid complaints from businesses that the withholding would disrupt cash flow, particularly for contractors that run on thin profit margins. Now, the rule has been repealed entirely.

By  |  06:12 PM ET, 11/16/2011

 
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