Today, the House of Representatives passed the first part of the Senate Jobs bill by a 217-201 vote. Prior to passing the bill, the House Democrats changed the effective date of a provision to provide about $2 billion to cover the cost of the bill. Since the House changed the bill, the Senate will have to consider and pass the bill again. If the Senate passes the bill, it will be sent to President Obama for his signature. Meanwhile, the Senate continues to work on passing the second part of the Senate Jobs bill. The Senate is considering amendments to the bill with the goal of final passage sometime next week.
In other news, the White House has called on Congress to pass health-care reform legislation by March 18th. At this time, it appears that Congress will utilize the budget-reconciliation process to pass portions of health-care reform. This is significant because Congress had also considered using the reconciliation process to pass H.R. 3221, the Student Aid and Fiscal Responsibility Act (SAFRA); however, the reconciliation process can only be used once per year. SAFRA has been on hold while health-care reform legislation worked its way through Congress. SAFRA would eliminate the Federal Family Education Loan Program and all new federal student loans would be Direct Loans. Most importantly, SAFRA contains the American Graduation Initiative (AGI) which provides almost $10 billion for community colleges. There is an expectation that the Senate’s version of SAFRA will likely contain less funds for AGI because the increased funds necessary to cover the rise in the number of Pell Grant recipients. If the Senate decides to move to accommodate the March 18th timeframe, the Senate Health, Education, Labor and Pensions Committee will need to introduce and pass their version of SAFRA soon.
The first part of the Senate’s Jobs bill includes:
1) Payroll Tax Exemption: offers an exemption from social security payroll taxes for every worker hired in 2010 that has been unemployed for at least 60 days. 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. ($13 billion)
2) Section 179 Expensing: helps small businesses grow by allowing them to write off more of their expenditures.
3) Highway Trust Fund Extension: extends existing highway programs, which provides states and localities with the certainty they need to make decisions on projects.
4) Expansion of Build America Bonds: allows state and local governments to borrow at lower costs to finance more infrastructure projects and put people to work. ($2 billion)
The second part of the Senate’s Jobs bill provides unemployment insurance and COBRA health benefits from February 28, 2010 – December 31, 2010. The total package costs $150 billion. Additionally, the bill extends a number of tax credits that have expired, including the qualified tuition deduction, research and development credit, increased funding for state Medicaid programs, and a number of credits aimed at small businesses. This bill does not include funding for an “Education Jobs Fund.”
To view the press release, go to: http://finance.senate.gov/press/Bpress/2010press/prb030110b.pdf