Jobs Bill Costing $17.6B Goes to President Obama After Senate Passes It by a 68-29 Vote

Voting 68 to 29, the Senate has passed the massive job-creation bill Hiring Incentives to Restore Employment Act, or H.R. 2847.  The bill that carries a $17.6 cost provides employers with financial incentives for hiring unemployed workers. The bill now goes to President Barack Obama who is widely expected to sign it into law.

In particular, the bill would offer an exemption from social security payroll taxes for every worker hired in 2010 that has been unemployed for at least 60 days. The maximum value would be equal to 6.2% of wages up to the FICA wage cap ($106,800). There would also be an additional $1,000 income tax credit for every new employee retained for 52 weeks to be taken on the employer’s 2011 income tax return. This proposal is estimated to cost $13 billion over ten years.

By way of background, on June 12, 2009, Rep. Allan Mollohan introduced H.R. 2847, the Commerce, Science, Justice Appropriations Act, 2010 in the House.  On December 16, 2009, Rep. Chellie Pingree introduced H.Res. 976, to modify H.R. 2847.  This action substituted the “Jobs for Main Street Act, 2010” as Division A of the Act and made other changes.  On December 16, 2009, the House passed H. Res. 976 by a vote of 228 – 201 (Roll No. 983).  The House then passed H.R. 2847 by a vote of 217 – 212 (Roll No. 991).

On February 11, 2010, the bill was placed on the Senate Legislative Calendar.  Senator Harry Reid offered S.A. 3310, a substitute amendment to H.R. 2847.

The Senate passed the original version of the HIRE Act by a 70 - 28 vote on February 24, 2010 [Roll Call Vote 25, 2/24/10].  By a vote of 217 to 201, the House of Representatives subsequently passed the HIRE Act, with an amendment, on March 4, 2010 .  The amendment included the following changes:

- A delay in the effective date of the worldwide allocation of interest provision through 2020;

- Restatement of the requirement that at least 10 percent of the amounts made available under titles I, III, and V of SAFETEA-LU, subtitles A and C of the HIRE Act, and section 403 of title 23 of the U.S. Code would be expended through small businesses owned and controlled by socially and economically disadvantaged individuals;

- Extension of the incentives for hiring and retaining new employees to businesses in U.S. territories and possessions;

- Technical corrections to the HIRE Act relating to for the incentives that would be made available to hire and retain employees; and

- Modifications of the value of the direct payment option for certain tax credit bonds.

In addition, the legislation would extend 2008 and 2009 section 179 expensing thresholds so that taxpayers may elect to write-off up to $250,000 of certain capital expenditures (subject to a phase‐out once expenditures exceed $800,000) in 2010 in lieu of depreciating those costs over time. This proposal is estimated to cost $35 million over ten years.

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