Thursday, March 18, 2010

Making Sense of the Jobs Bills

To combat high unemployment rates, Democrats have promised a series of jobs bills that should provide much needed relief to American families. The two most talked about jobs bills-"The HIRE Act"and "The American Workers,States, and Business Relief Act"- respectively provide tax breaks to private sector employers that hire unemployed workers and extend unemployment benefits.Yet, many critics continue to question whether these efforts are simply more stimulus spending that will fail to have an impact on rising unemployment rates. Here's a break-down of the jobs bill agenda in Congress:

The Hiring Incentives to Restore Employment (HIRE) Act [H.R 2847]: Approved by a vote of 68-29, the Senate passed an $18 billion dollar jobs bill on Wednesday with 11 Republican Senators supporting the bipartisan effort known as the HIRE Act [H.R. 2847] Today, the bill was signed into law by President Obama. In an effort to support the private sector, the bill exempts employers from paying social security taxes for new employees who are hired before the end of 2010 and who have been unemployed for the last 60 days. Employers will also receive a $1000 tax credit for retaining new employees for at least a year. Further spurring job creation, the bill provides funding for federal highway construction programs and will transfer $20 billion into the highway trust fund. The last two notable provisions allow small businesses to write off investments they make on buying equipment and will reform municipal bonds to expand investment in schools and clean energy through the Build America Bonds program from the ARRA. Ultimately, supporters estimate that 250,000 jobs will be created by the end of the year.

American Workers, States, and the Business Relief Act [H.R. 4213]:  With a vote of 62-36, the Senate passed the $140 billion jobs bill known as "The American Workers, States, and Business Relief Act" with the support of six Republicans and a large number of Democrats. The bill would amend the Internal Revenue Code of 1986 and also extend certain provisions from the American Recovery and Reinvestment Act (ARRA). Among the notable provisions, $80 billion of the bill’s funding will go towards extending both Unemployment Insurance (UI) and COBRA healthcare benefits through the end of 2010 while the Federal Medicaid Match (FMAP) will be extended until June 2011.

The Senate, however, rejected the Murray-Kerry amendment that would commit $1.3 billion through the Workforce Investment Act to extend summer jobs and would also extend the TANF Emergency Fund for six months. Since the TANF Emergency Fund is set to expire on September 30, 2010, the lack of inclusion of the Fund in this jobs bill comes as a hard blow to community change advocates. Especially since many states have accessed the TANF Emergency Fund to fight high unemployment within their communities through cash assistance, short term benefits and subsidized employment programs. Ideally, the TANF Emergency Fund should be extended for a full year and should receive an additional 2.5 billion dollars as proposed in the President's 2011 budget. Many believe that there is still a chance that the Fund will be included in the bill when it returns to the House, but it will face some opposition from Republicans who have dubbed it the “debt extender” bill that adds $100 billion dollars to the deficit. We'll be keeping a close eye on this jobs bill as it moves through Congress.

There are still a number of other jobs bills on the horizon. On March 3, 2010, the Local Jobs for America Act was introduced by George Miller of the Education and Labor Committee. The bill provides $75 billion over two years to local communities to hire vital staff; funding for 50,000 on-the-job private-sector training positions; $23 billion this year to help states support 250,000 education jobs; $1.18 billion to put 5,500 law enforcement officers on the beat; and $500 million to retain, rehire, and hire firefighters. In addition, "The Small Business and Infrastructure Jobs Tax Act of 2010"[H.R. 4849] is a bill that would provide tax incentives for small business job creation as well as tax incentives for infrastructure job creation. The bill’s markup hearing is being held today in the Ways and Means Committee.

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