By this afternoon, Senate Majority Leader Harry Reid announced he was going to break that package up and move smaller parts of it, which he said should get even more bipartisan support.
Reid was asked if movement on jobs bills and the news today that Sen. Chris Dodd is working with Republican Bob Corker of Tennessee on a bipartisan financial regulatory reform proposal, indicate a new era of bipartisanship.
“I hope so,” said Reid, “But I have a long list of disappointments where we start out holding hands and end up pointing fingers. the proof is in the pudding.”
It certainly runs counter to the bipartisanship theme that Sen. Tom Harkin, D-IA, is going to introduce a proposal to do away with the 2/3 majority “cloture” rules in the Senate today.
That’s a proposal Reid said has zero chance of passing.
“It takes 67 votes and that kind of answers the question,” he said.
Reid said the Baucus-Grassley proposal, which includes items not related to job creation runs the risk of turning off Americans tired of the wheeling and dealing of the legislative process.
“The message is so watered down with people wanting things in this big package that we're going to have to come back to that,” he said.
So what will be in the first jobs bill?
Reid said Senators would vote –after their President’s Day break next week – on an approximately $50 billion bill that includes four items from the Baucus/Grassley draft (their wording below):
Schumer-Hatch Jobs Payroll Tax Exemption. This provision 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.
Extension of Section 179 Expensing. This provision 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.
Election to Convert Tax Credit Bonds to Build America Bonds. Under current law, Congress provided tax credit bonds to qualifying issuers for certain school and energy projects. Tax credit bonds provide the bond holder a federal tax credit in lieu of interest. Build America Bonds provide qualifying issuers a direct payment from the Treasury for a portion of the interest paid on the bond for government works projects. This provision would allow qualifying issuers of tax credit bonds the option of issuing tax credit bonds under current law, or utilizing the direct subsidy Build America Bond structure for bonds issued after the date of enactment. The federal subsidy would equal 45 percent of the borrowing cost (65 percent for qualifying small issuers). The proposal is estimated to cost approximately $2 billion over ten years.
Highway Trust Fund. This provision would extend highway and transit programs through calendar year 2010, and transfers from the General Fund to the Highway Trust Fund $19.5 billion in interest foregone since 1998. It would also halt annual payments the Highway Trust Fund makes to the General Fund as reimbursement for tax-exempt users of the highway program (e.g. state/local fleets and transit providers). This provision also repeals an $8.7 billion rescission of unobligated balances of contract authority, a provision which passed in the 2005 SAFETEA-LU legislation. This proposal has no revenue effect.