In a conference call Thursday, Sens. Jack Reed and Chuck Schumer, joined by Mark Zandi, chief economist at Moody’s Economy.com, discussed the HIRE Act, the jobs bill Reid is planning to bring to the floor on Monday.
TWI reports that Zandi downplayed the impact this bill alone is likely to achieve.
[Zandi] said the bill is "too small" to tackle the jobs crisis and ensure that the country doesn’t slip back into recession.
"I don’t think this is enough," Zandi told reporters during a conference call with Democratic leaders. "It’s too small a step and more needs to be done."
While House Democrats passed a $154 billion jobs bill in December — a proposal featuring billions for new infrastructure projects, state help and unemployment benefits — Senate leaders are eying a much smaller package focused on business tax cuts. The reason is clear: In a tough election year when 60 votes are needed to pass anything at all through the Senate, there’s little appetite for another huge spending bill — even if another huge spending bill is the best solution to the jobs crisis.
The Senate’s $15 billion proposal is centered around $13 billion in tax breaks to businesses that hire unemployed workers this year, a provision championed by Sens. Charles Schumer (D-N.Y.) and Orrin Hatch (R-Utah). Other components include an extension of highway funding, a bonds provision allowing state and local governments to borrow cash at lower rates, and another business tax break empowering companies to write off more expenses. The bill, Democrats say, is just the first in a series of legislative efforts designed to spur hiring.
The Senate will have to take up unemployment insurance and COBRA extensions next week as well, because they expire at month's end. After that, Schumer and Reed said they will take up legislation to provide aid to states. But at this point, passage of the jobs bill is entirely at question. Despite the fact that each of the four elements of the bill have Republican co-sponsors, Republicans don't want to pass this bill because Harry Reid stripped out all the extraneous tax breaks that were in the "bipartisan" bill Baucus and Grassley originally negotiated.
Republicans are especially concerned over Reid's move to drop $31 billion worth of tax breaks for individuals and businesses, which had bipartisan support. The provisions expired at the end of last year and would amount to a major tax increase if not restored for 2010, backers argue.
Reid has said there will be other opportunities to move a tax extender bill, and that the scaled-back proposal headed to the floor should be focused solely on job creation. But the move is likely to cost support from two key negotiators on the earlier bipartisan package, Senate Finance ranking member Chuck Grassley and Sen. Orrin Hatch, R-Utah....
Hatch's opposition is also noteworthy in that he is the co-author of the centerpiece of the Reid bill: a payroll tax break for the remainder of the year for each employee hired that had been out of work for at least 60 days. Hatch worked on that $13 billion incentive with Sen. Charles Schumer, D-N.Y....
Senate Small Business ranking member Olympia Snowe also laid out her concerns with Reid's move in a letter Tuesday. She said the Reid bill, which contains higher small business expensing limits through 2010, should extend the provision for at least five years. As currently drafted, the one-year extension would provide only $35 million in tax relief.
And of course, there's Blanche Lincoln, who "said last week she opposed the loss of provisions such as the research tax credit and farm disaster aid." All this in a bill that was supposed to be about jobs.
Harry Reid has reached out to Scott Brown, on the slim chance that when he said he would be an independent voice after his election, he really meant it. Whether the first big vote Brown takes as a Senator is one that would go against his leadership remains to be seen, so Reid shouldn't be holding his breath on that one. It's very possible that Republicans will vote down jobs next week. This is a vote Reid has to force them to take.