Senate poised to pass veterans bill, despite concerns over economy

Thursday, November 10, 2011 | 12:50 p.m. CST

WASHINGTON — A united Senate is ready to approve legislation aimed at helping unemployed veterans and companies doing business with the government — a measure that includes the first, tiny slice of President Barack Obama's jobs plan that is likely to become law.

A day before Veterans Day, senators were poised to endorse the modest bill Thursday by a wide bipartisan margin. Passage would send the measure to the House, which is not meeting this week but seems likely to give the legislation final congressional approval as early as next week.

The measure includes tax credits of up to $9,600 for companies that hire disabled veterans who have been jobless for six months or more and enhanced job training and counseling for vets.

It also repeals a law requiring federal, state and local governments to withhold 3 percent of their payments to contractors. That statute, which has yet to take effect, was designed to thwart tax cheats, but lawmakers now say it makes it harder for those companies to hire more workers.

Economists say repealing the withholding requirement would have an imperceptible, if any, impact on jobs. Its implementation has been delayed until 2013.

Annulling the withholding law would cost the government $11.2 billion over the next decade. The legislation makes up the lost revenue by making it harder for some Social Security beneficiaries to qualify for Medicaid, the federal-state health program for low-income people.

For weeks, the two parties have battled to a standoff over the president's $447 billion jobs package, which features a payroll tax break for workers and employers and money for repairing bridges and hiring police officers. Thursday's vote represented a momentary respite in that struggle, which is being waged in the shadow of 2012 presidential and congressional elections sure to be dominated by the still wheezing economy.

"It's no secret that we are sharply divided on any number of economic and political issues facing average Americans right now," Sen. Patty Murray, D-Wash., said of the veterans provisions of which she was a chief author. "But this is one issue we should never be divided on."

Underscoring the ongoing partisan strife over the nation's bleak employment picture, passage of the bill was to be preceded by a vote on a massive Republican jobs amendment that faced certain defeat in the Democratic-run Senate. The language, sponsored by Sen. John McCain, R-Ariz., and others, combines more than two dozen GOP anti-tax, anti-regulatory proposals and contrasts sharply with Obama's approach.

"Our vision is, let's unleash the private sector," said Sen. Rand Paul, R-Ky., another sponsor. "Theirs is they're going to hire a few more people to dig ditches and fill them in."

The GOP jobs proposal would revamp the tax code by dropping the top individual and corporate income tax rates from 35 percent to 25 percent and require the Senate to vote on a balanced-budget amendment to the Constitution. It also would repeal Obama's health care overhaul, legislation passed last year to tighten federal oversight of Wall Street and other labor, energy and environmental regulations.

A backdrop to Thursday's vote was White House figures showing that about 240,000, or 12 percent, of veterans who have served since the terrorist attacks of Sept. 11, 2001, are unemployed.

Beyond increasing the tax credit to $9,600 for hiring disabled veterans, the bill also would create new tax credits of up to $5,600 for employers hiring veterans who have job hunted at least six months and $2,400 for those out of work for four weeks or more.

In addition, it would expand education and job training benefits for veterans, improve employment counseling they receive while still in the military and provide an extra year of job services for disabled veterans.

Overall, the tax breaks and jobs programs for veterans would cost just over $1 billion, Democratic aides said. It would be paid for by extending a fee the Veterans Affairs Department charges to back home loans.

The law requiring governments to withhold 3 percent of their payments to contractors was enacted five years ago under President George W. Bush in reaction to government investigations finding that thousands of contractors were behind in their taxes by billions of dollars. But with politicians focusing these days on job creation, lawmakers say the requirement would keep companies from using the cash to hire more workers.

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