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Democrats offer smaller jobs bill in bid for support

Harry Reid
Harry Reid
Manuel Balce Ceneta, Associated Press

WASHINGTON — Stung by criticism that a bipartisan jobs bill emerging in the Senate wouldn't create many jobs, Senate Democrats on Thursday proposed a new, stripped-down version they hope will still get support from both Republicans and Democrats.

Republicans, however, accused Democrats of reneging on their deal, putting in jeopardy a short-lived attempt at bipartisan lawmaking.

Senate Majority Leader Harry Reid's latest bill focuses on several popular provisions aimed at boosting job creation, including a new tax break negotiated with Republicans for companies that hire unemployed workers and for small businesses that purchase new equipment. It also would renew highway programs and help states and local governments finance large infrastructure projects.

Reid, D-Nev., unveiled the pared-back plan after Senate Democrats balked at a broader bill stuffed with unrelated provisions sought by lobbyists for business groups and doctors. The surprise blew apart an agreement with key Republicans like Chuck Grassley of Iowa, who had worked with Finance Committee Chairman Max Baucus, D-Mont., for weeks to produce a bill containing the extra provisions.

The original bill had won support from across the political spectrum, from President Barack Obama as well as conservative Republicans in the Senate, offering the promise of a rare bipartisan package in a Congress that has been gripped by partisan fights. To get that support, however, the package had morphed into a 361-page grab bag of provisions that included extending benefits to the unemployed and tax breaks for businesses.

The bipartisan agreement is off. But Democrats say they now have a package focused solely on creating jobs, and they're all but daring Republicans to vote against it.

"Our side isn't sure that the Republicans are real interested in developing good policy and to move forward together," said Sen. Thomas Carper, D-Del. "Instead, they are more inclined to play rope-a-dope again. My own view is, let's test them."

Said Reid: "Republicans are going to have to make a choice. I don't know in logic what they could say to oppose this."

Republicans said they were blind-sided by Reid's about-face.

"Sen. Reid's announcement sends a message that he wants to go partisan and blame Republicans when Sen. Grassley and others were trying to find common ground," Grassley spokeswoman Jill Kozeny said in an e-mail. "The majority leader pulled the rug out from work to build broad-based support for tax relief and other efforts to help the private sector recover from the economic crisis."

The bigger bill got a decidedly mixed reception at a raucous luncheon meeting of Democrats, many of whom were uncomfortable with supporting a bill containing so many provisions unrelated to creating jobs, including loans for chicken producers and aid to catfish farmers.

The provisions also included a $31 billion package of tax breaks for individuals and businesses, an extension of several parts of the USA Patriot Act and higher payments for doctors facing Medicare payment cuts.

The surprise move appears to insulate Democrats from criticism that greeted the earlier, lobbyist-backed legislation first leaked on Tuesday and officially unveiled by Baucus and Grassley — to praise from the White House — only hours before Reid's announcement.

"The message is so watered down, with people wanting other things in this big package," Reid told reporters.

The centerpiece of Reid's new bill is a $13 billion payroll tax credit for companies that hire unemployed workers. The idea, by Sens. Chuck Schumer, D-N.Y., and Orrin Hatch, R-Utah, would exempt businesses hiring unemployed workers in 2010 from the 6.2 percent Social Security payroll tax for those hires.

It also would provide an additional $1,000 tax credit for workers retained for a full year and deposit an additional $20 billion into the federal highway trust fund — money that would have to be borrowed. There's also $2 billion to subsidize bond issues by state and local governments for large infrastructure projects

But Republicans are irate at the strong-arm tactics and said Reid had gone back on a deal reached with some of the Senate's heaviest hitters, including Minority Leader Mitch McConnell of Kentucky.

"Needless to say, Senator Hatch is deeply disappointed that the majority leader has abandoned a genuine bipartisan compromise only hours after it was unveiled in favor of business-as-usual, partisan gamesmanship," Hatch spokeswoman Antonia Ferrier said.

Still, a number of the provisions dropped on Thursday — including help for the unemployed, the business tax breaks and a renewal of soon-to-expire provisions of the Patriot Act — are sure to return soon since they expire at the end of the month.

At the same time, some Democrats want other items added in, especially Obama's $25 billion proposal to help cash-strapped states with their Medicaid burdens.

Both the administration and Democrats controlling Congress have been pushing to find new ways to ease the country's chronically high unemployment rate, which now stands at 9.7 percent of the labor force.