WASHINGTON — Key Democrats and Republicans in the Senate reached a rare
bipartisan agreement on Thursday on steps to spur job creation. But Democratic
leaders said they would move ahead on only some elements as the two parties
maneuvered to address both the struggling economy and voter unrest over gridlock
in Washington.
Senator Harry
Reid, the Nevada Democrat and majority leader, said he would take four core
job-creating initiatives from the bipartisan proposal — including tax breaks for
businesses that hire unemployed workers and increased public works spending —
and seek to move those rapidly through the Senate.
gWe feel that the American people need a message,h Mr. Reid said. gThe
message that they need is that wefre doing something about jobs.h
Yet his decision to embrace only portions of the bipartisan plan developed by
Senators Max
Baucus, Democrat of Montana, and Charles
E. Grassley, Republican of Iowa, caught some lawmakers by surprise and
threatened to undermine Republican support for the proposal even as members of
Congress and the White House sought ways of working together across party lines
after months of deep partisan division.
The White House projected Thursday that unemployment would fall this year by
only a little, if at all, and would remain well over 6 percent until 2015.
While Mr. Reid stripped out of the bipartisan bill some tax breaks and other
provisions intended to win Republican support, as well as special-interest
provisions to win the backing of specific senators, the scaled-back package
retained a combination of tax cuts and spending with the potential to win
support from both parties.
The centerpiece is a payroll tax holiday that would waive the 6.2 percent Social
Security tax for any employer who hires a worker who has been out of a job
for at least 60 days. In addition, the bill would provide a $1,000 income tax
credit for every new employee retained for at least 52 weeks.
It would also extend a tax break that would allow businesses to write off up
to $250,000 in capital investments in 2010 rather than depreciating the costs
over time, and reauthorize spending on road and transit programs through the end
of the year. And it would allow state and local governments to receive a federal
subsidy for a portion of the interest paid on bonds that finance public works
projects.
The cost of the package laid out by Mr. Reid would be at least $15 billion
over the next decade.
Hours before Mr. Reidfs announcement, Mr. Baucus, chairman of the Finance
Committee, and Mr. Grassley, the senior Republican on the panel, had unveiled a
broader, $85 billion agreement that also included an array of other provisions
intended to generate support. They included extended unemployment benefits and
health care for the unemployed as well as the renewal of an array of tax breaks
that are due to expire.
That proposal had drawn backing from top Republicans and Democrats as well as
the White House. Some of the authors of its provisions, including Senator Orrin
G. Hatch, Republican of Utah, said they were left perplexed by Mr. Reidfs
decision to scale it back and were now unsure they could support any bill.
gNeedless to say, Senator Hatch is deeply disappointed that the majority
leader has abandoned a genuine bipartisan compromise only hours after it was
unveiled in favor of business-as-usual, partisan gamesmanship,h said Antonia
Ferrier, a spokeswoman for Mr. Hatch, who helped write a provision suspending
the payroll tax for companies that hire out-of-work people.
Democrats said Mr. Reidfs hand was forced by objections from rank-and-file
Democrats that the measure was not focused tightly enough on job creation and
included too many corporate tax breaks they viewed as concessions to
Republicans.
At the same time, they said, Republican leaders had made no firm commitment
to support the measure and they feared they could face conservative attacks for
extraneous provisions like disaster aid for Arkansas and Mississippi.
gI would prefer a jobs bill that simply focuses on some specific job-creating
initiatives,h said Senator Byron
L. Dorgan, Democrat of North Dakota.
The dust-up over the jobs bill reflects the difficulties the parties are
finding in working together even as lawmakers from both sides realize that
voters want to see more cooperation and less confrontation. And both sides are
making overtures.
Also on Thursday, Senator Christopher
J. Dodd, Democrat of Connecticut and chairman of the Banking Committee, and
Senator Bob Corker, Republican of Tennessee, said they would cooperate in trying
to overhaul regulation of the financial services industry after earlier
bipartisan talks seemed to falter.
The administration also continues to work to find Republican support for Mr.
Obamafs plan to create a bipartisan commission to rein in the budget deficit. In
an interview with Bloomberg Business Week published Thursday, the president said
he would set no preconditions on steps the commission might propose to bring the
budget back toward balance, even if it meant consideration of tax increases on
the middle class — a step Mr. Obama vowed during the 2008 presidential campaign
not to support.
At the White House, Robert
Gibbs, Mr. Obamafs spokesman, encouraged lawmakers to find a way to work
together.
gThe American people want to see Washington put aside partisan differences
and make progress on jobs,h Mr. Gibbs said.
Republicans were more receptive to the bipartisan jobs proposal than they
have been to Democratic initiatives this year, but the leadership had not
pledged its backing on the floor. On Thursday, before Mr. Reid pared back the
bill, Senator Mitch
McConnell of Kentucky, the Republican leader, called it a work in
progress.
The hesitation by top Republicans and the prospect that they would want to
propose politically charged amendments made Democrats question whether the
opposition was serious about cooperating and reminded them of Republican
overtures on health care that later fell through.
Some Democrats noted that Mr. Baucus had spent months negotiating with Mr.
Grassley on health care legislation only to come away empty-handed, ultimately
costing the Senate valuable time on the issue.
Mr. Reid said he still hoped to win some Republican backing for the
trimmed-down jobs measure since they had professed to support the individual
provisions.
gRepublicans are going to have to make a choice,h he said.
But Republicans said that it was Mr. Reid who had made a choice, the wrong
one.
gThe majority leader 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,h said Jill Kozeny, a spokeswoman for Mr.
Grassley.
Jackie Calmes contributed
reporting.