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U.S. House to vote on tax breaks for new hires

Sen. Jack Reed (left), D-R.I., and Senate Finance Committee Chairman Sen. Max Baucus, D-Mont., take part in a news conference on Capitol Hill in Washington on Thursday to discuss the Senate Jobs Bill. (AP Photo/Harry Hamburg)

Sen. Jack Reed (left), D-R.I., and Senate Finance Committee Chairman Sen. Max Baucus, D-Mont., take part in a news conference on Capitol Hill in Washington on Thursday to discuss the Senate Jobs Bill. (AP Photo/Harry Hamburg)

By ANDREW TAYLOR
Associated Press Writer

WASHINGTON (AP) — Despite widespread sentiment that it will not create many jobs, a measure awarding a tax break to U.S. companies that hire unemployed workers appeared headed for House passage Thursday.

The measure also extends federal highway programs through the end of the year.

Some Democrats, especially those representing minority districts, feel the approximately $35 billion jobs bill is too puny. However, the pressure is on to create jobs and deliver a badly needed win for President Barack Obama and a Democratic Party struggling in opinion polls and facing losses in November elections. Further jobs measures are promised.

“If that’s the only thing that I can vote on … I’ll vote for it, obviously,” said Rep. Bill Pascrell, a Democrat. “We’ve got to get something moving. We’ve got to get something done.”

“It’s really not a jobs bill,” said Rep. Barbara Lee, a Democrat. “It’s one small piece.” Lee said she instead wants money for job training and youth summer jobs.

The House had passed a far larger measure in December that contained almost $50 billion in infrastructure funding, $50 billion in help for cash-starved state governments, and a six-month extension of jobless aid.

The Senate responded last week with the far smaller measure that the House is reluctantly accepting. The House amended the measure Thursday to conform with so-called pay-as-you-go budget rules that have become an article of faith among moderate Democrats. The rules require future spending increases or tax cuts to be paid for with either cuts to other programs or equivalent tax increases.

The minor tweak means that the notoriously balky Senate would have to act again before Obama could sign it into law.

The $35 billion bill — blending $15 billion in tax cuts and subsidies for infrastructure bonds issued by local governments with the $20 billion in transportation money — is far smaller than the massive economic stimulus bill enacted a year ago.

Nearby, the Senate is debating a far more costly measure to clean up a lot of unfinished business from last year. The $100 billion-plus bill would extend unemployment assistance, revive a bevy of expired tax breaks, help states with soaring Medicaid costs and prevent doctors from having to absorb big cuts in Medicare payments. The popular initiatives are traditionally extended on a bipartisan basis for brief periods of time, which hides their long-term costs.

The Senate plans to act on the jobs bill after wrapping up the unfinished-business bill, which means it probably won’t be sent to President Barack Obama until next week.

The jobs bill contains two major provisions. First, it would exempt businesses hiring the unemployed from the 6.2 percent payroll tax through December and give them an additional $1,000 credit if new workers stay on the job a full year. The government pension trust fund would be reimbursed for the lost revenue.

Second, it would extend highway and mass transit programs through the end of the year and pump in $20 billion for the spring construction season. The money would make up for lower-than-expected gasoline tax revenues.

Associated Press writer Stephen Ohlemacher contributed to this report.

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