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Senate Dems Favor New Jobs Bill

Democrats scrapped bipartisan jobs bill in favor of one they say is leaner and focused solely on putting Americans back to work.

WASHINGTON (AP) -- Senate Democrats scrapped a bipartisan jobs bill in favor of one they say is leaner and focused solely on putting Americans back to work, and they're all but daring Republicans to vote against it.

The new, stripped-down proposal followed criticism that the bipartisan version wouldn't create many jobs.

The switch brought sharp accusations of reneging from Republicans who thought they had a deal, jeopardizing a brief attempt at bipartisan lawmaking.

Senate Majority Leader Harry Reid's latest bill focuses on several popular provisions aimed at boosting job creation, including a new tax break negotiated with Republicans for companies that hire unemployed workers and for small businesses that purchase new equipment. It also would renew highway programs and help states and local governments finance large infrastructure projects.

Reid, D-Nev., put forward the pared-back plan after Senate Democrats balked at a broader bill stuffed with unrelated provisions sought by lobbyists for business groups and doctors. The surprise blew apart an agreement with key Republicans like Chuck Grassley of Iowa, who worked with Finance Committee Chairman Max Baucus, D-Mont., for weeks to produce a bill containing the extra provisions.

The original bill had won support from across the political spectrum, from President Barack Obama as well as conservative Republicans in the Senate, offering the promise of a rare bipartisan package in a Congress that has been gripped by partisan fights. To get that support, however, the package had morphed into a 361-page grab bag of provisions that included extending benefits to the unemployed and tax breaks for businesses.

Now, the bipartisan agreement is off.

"Our side isn't sure that the Republicans are real interested in developing good policy and to move forward together," said Sen. Thomas Carper, D-Del. "Instead, they are more inclined to play rope-a-dope again. My own view is, let's test them."

Said Reid: "Republicans are going to have to make a choice. I don't know in logic what they could say to oppose this."

House Speaker Nancy Pelosi issued a statement Friday saying she would work with Reid on the bill. However, she emphasized that she wants the bill to include key provisions from a $174 billion jobs bill passed by the House in December, including $23 billion in aid to states, mainly for schools.

The House bill is much bigger than Reid's proposal, with more emphasis on spending than tax breaks. The House bill didn't include a tax break for hiring workers because House Democrats were skeptical that it would create many jobs.

Reid officially put the measure before the Senate on Thursday evening, setting up a key test vote when the chamber returns the week of Feb. 22. He'll need at least one GOP vote to prevail in a filibuster challenge.

Republicans said they were blind-sided by Reid's about-face.

Grassley spokeswoman Jill Kozeny said in an e-mail that Reid "pulled the rug out from work to build broad-based support for tax relief and other efforts to help the private sector recover from the economic crisis."

The bigger bill got a decidedly mixed reception at a luncheon meeting of Democrats, many of whom were uncomfortable with supporting a bill containing so many provisions unrelated to creating jobs, including loans for chicken producers and aid to catfish farmers.

The provisions also included a $31 billion package of tax breaks for individuals and businesses, an extension of several parts of the USA Patriot Act and higher payments for doctors facing Medicare payment cuts.

The surprise move appears to insulate Democrats from criticism that greeted the earlier, lobbyist-backed legislation first leaked on Tuesday and officially unveiled by Baucus and Grassley -- to praise from the White House -- only hours before Reid's announcement.

The centerpiece of Reid's new bill is a $13 billion payroll tax credit for companies that hire unemployed workers. The idea, by Sens. Chuck Schumer, D-N.Y., and Orrin Hatch, R-Utah, would exempt businesses hiring unemployed workers in 2010 from the 6.2 percent Social Security payroll tax for those hires.

It also would provide an additional $1,000 tax credit for workers retained for a full year and deposit an additional $20 billion into the federal highway trust fund -- money that would have to be borrowed. There's also $2 billion to subsidize bond issues by state and local governments for large infrastructure projects

But Republicans are irate at the tactics and said Reid had gone back on a deal reached with some of the Senate's heaviest hitters, including Minority Leader Mitch McConnell of Kentucky.

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