Senate aims help at jobless vets, contractors

By Alan Fram

Associated Press

Published: Monday, Nov. 7 2011 2:35 p.m. MST

Secretary of Defense Leon Panetta, right, chats with Jonathan Tisch, chairman and CEO of Loews, during a meeting for CEOs and others hosted by the Goldman Sachs Foundation in New York, Monday, Nov. 7, 2011. Ahead of Veterans' Day, President Obama pressed lawmakers to approve tax credits for businesses to hire unemployed veterans or injured veterans who have been out of work.

Kathy Willens, Associated Press

Enlarge photo»

WASHINGTON — The Senate seemed ready Monday to temporarily ease its partisan standoff over President Barack Obama's jobs plan and come together on providing an economic boost to two potent interest groups: veterans and businesses.

Senators were expected to vote overwhelmingly Monday to start debating a bill repealing a requirement that federal, state and many local governments withhold 3 percent of their payments to contractors. That bill has been lobbied by a wide swath of industry groups large and small and has no significant opposition.

By the time the Senate approves the legislation — perhaps later this week — Democrats planned to add language backed by both parties offering tax breaks to companies that hire veterans and providing vets with employment counseling and other job-hunting services.

The tax credits, up to $9,600 for companies hiring disabled veterans who have been jobless at least six months, would represent the first — though tiny — piece of Obama's $447 billion jobs proposal to be approved by Congress, assuming Senate and then House passage.

The expected cooperation contrasted with the two parties' battling at a time when persistent 9 percent unemployment is keeping 14 million Americans out of work and looming as the dominant issue in the 2012 presidential and congressional elections. It also masked the divisions between Democrats and Republicans over the dominant pieces of Obama's jobs plan — spending huge sums to repair roads, hire teachers and give workers and companies breaks on the payroll tax.

Not coincidentally, the measure was beginning to move toward approval just ahead of Friday's Veterans Day celebrations, when lawmakers stream to their home districts for speeches and parades. And even as the two sides seemed ready to cooperate, they exchanged partisan slings over lawmakers' refusal so far to approve the rest of the president's jobs proposal.

"There's no good reason to oppose this bill, not one," Obama said in the White House Rose Garden as he promoted his proposed aid for veterans. "Our veterans did their jobs. It's time for Congress to do theirs."

On the Senate floor, Majority Leader Harry Reid, D-Nev., cited Republican opposition that has sunk the jobs legislation so far this year and taunted, "Now we will see whether Senate Republicans are willing to put jobs for veterans at risk as well. I certainly hope they are not.

Firing back, Minority Leader Mitch McConnell, R-Ky., complained that the Republican-run House has approved nearly two dozen jobs measures that the Democratic-led Senate has ignored. The reason, he said: "So the president can go around on a bus and blame Congress for the country's problems."

McConnell added, "It's only a matter of time before the American people catch on to the Democrats' refusal to act."

The White House says veterans who have served since the terrorist attacks of Sept. 11, 2001, have a 12 percent unemployment rate, three points above the overall national average.

To address that, the Democratic amendment will include Obama's proposal to create a new tax credit of $2,400 for companies hiring veterans who have been jobless at least four weeks, and $5,600 for vets out of work at least six months. In addition, he proposed doubling the existing tax credit that employers get for hiring a disabled veteran unemployed at least half a year from $4,800 to $9,600.

According to a White House estimate last September, these credits would cost $90 million — a minute sliver of Obama's overall plans for fighting joblessness.

In addition, the Democratic amendment will include compromise jobs programs worked out between the chairs of the Senate and House Veterans Affairs committees, Sen. Patty Murray, D-Wash., and Rep. Jeff Miller, R-Fla.

These include money for veterans' job training and education at community colleges and trade schools, job counseling for troops before they leave the military, and expanded benefits to disabled veterans.

Senate aides said the job training proposal was expected to cost around $1 billion. To pay for the veterans' tax credits and training, the measure would extend a fee the Department of Veterans Affairs charges for guaranteeing home loans, the aides said.

The veterans language is supported by groups incuding Disabled American Veterans and Iraq and Afghanistan Veterans of America.

By 405-16, the House approved a bill two weeks ago repealing the withholding requirement for government contractors. It would cost $11.2 billion in lost revenue over 10 years, which the measure would recoup by making it harder for some Social Security recipients to qualify for Medicaid under Obama's health care overhaul law.

Days before that House vote, the Senate voted narrowly against debating a GOP version of the government contractors' measure after Republicans proposed paying for it by cutting unspecified spending by federal agencies, drawing strong Democratic opposition.

The withholding requirement became law five years ago, enacted by President George W. Bush and a GOP-run Congress in response to investigations showing that thousands of contractors were behind on billions of dollars in taxes. While there is no evidence that problem has abated, lawmakers are far more focused on showing voters they are trying to fix the economy.

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