Congress ready to pass bill for vets, contractors
WASHINGTON (AP) - Congress is getting ready to send President Barack Obama a bill helping government contractors and unemployed veterans that contains the first shred of his jobs plan likely to reach his desk for his signature.
The House planned to vote on the legislation Wednesday and seemed likely to give it overwhelming support. Last Thursday, the Senate voted its approval by 95-0.
Final congressional approval would let Obama and lawmakers claim credit for protecting jobs at a time when the public is clearly furious over the nation's unemployment rate, which has been stuck at around 9 percent. With the president and congressional Republicans in strong disagreement over how to fix the staggering economy, he and lawmakers may not have many other job-related accomplishments to show voters in time for next year's presidential and congressional elections.
The bill would repeal a 2006 law requiring the federal, state and local governments to withhold 3 percent of their payments to many companies with which they do business. That statute, which doesn't take effect until 2013, was supposed to pressure contractors to fully pay their taxes, but lawmakers now say the withholding would deny cash to companies that they could better use to hire more workers.
Trying to keep the pressure on, a coalition of around 200 industry groups - from aeronautical repair businesses to water treatment companies - wrote to House members this week urging passage of the bill.
"The profit margin for many businesses is often less than 3 percent, meaning that the withholding tax will create significant cash flow problems for day-to-day operations as well as draining capital that could be used for job creation and business expansion," they wrote.
Many economists have said annulling the withholding law would have a minimal impact on hiring.
Erasing the law would reduce federal revenues by an estimated $11.2 billion over the coming decade. It would be paid for by making it harder for some elderly people to qualify for Medicaid by changing the formula used to determine their eligibility.
The bill would also establish new or more generous tax credits for companies hiring unemployed veterans, up to $9,600 for disabled vets who have looked for work for more than half a year. The size of the credit would be based on the worker's salary and how long the worker was unemployed.
Obama proposed the new tax credits in his $447 billion jobs bill in September. The credits would cost an estimated $95 million over 10 years, far less than 1 percent of the overall bill's price tag.
Lawmakers have rejected or ignored most of Obama's jobs plan. The president has made repeated speeches and campaign-style trips promoting it and blaming Congress for not approving the package.
The measure the House was debating Wednesday would also expand education and job training benefits for veterans, improve job counseling that troops get before leaving the military and provide an additional year of job services for disabled veterans.
The hiring tax credits and veterans' programs would be financed by extending a fee the Veterans Affairs Department charges to back mortgages.