WASHINGTON — On Veterans Day eve, an uncharacteristically unified Senate emphatically passed a bill to help unemployed veterans and government contractors that includes the first, small slivers of President Barack Obama's jobs agenda that he is likely to sign into law.
Thursday's 95-0 vote gave lawmakers the opportunity to fly home to holiday events and boast about helping veterans and protecting jobs. But it did little to help close the scorching partisan divide over how to revive the gasping economy, an issue that seems sure to decide next year's presidential and congressional elections.
"We deal with a lot of contentious issues here, but this should not be one of them," said Sen. Jon Tester, D-Mont., a leading sponsor of the veterans' provisions.
The legislation would award tax credits of up to $9,600 to companies that hire disabled veterans who have been job-hunting for at least half a year and strengthen employment counseling and training programs for vets and troops about to leave the military.
It also would erase a law, yet to take effect, requiring federal, state and local government agencies to withhold 3 percent of their payments to companies with which they conduct business. That law was enacted under President George W. Bush to nudge companies to fully pay their taxes, but lawmakers now say it would fence off money those firms could better use to hire more workers.
The House is expected to approve the bill resoundingly next week, which would send it to Obama.
The president's signature would make the veterans tax credits the first fragment of his $447 billion jobs package to be enacted. Those tax credits would cost $90 million over the next decade, according to White House estimates. Obama also has supported annulling the withholding requirement on contractors' payments.
The rest of the president's jobs plan, which is highlighted by payroll tax cuts and money for infrastructure projects and hiring teachers and police officers, has foundered. A senior administration official told reporters that the White House will pressure Republicans over the president's proposal to extend this year's cut in the 6.2 percent Social Security payroll tax cut through 2012, arguing that without a renewal people's taxes would rise next year.
There are about 240,000 unemployed veterans from the wars in Iraq and Afghanistan, around 12 percent of those who served there, the White House says. A total of 850,000 veterans overall are out of work, and 1 million additional service members are expected to return to civilian life by 2016, according to White House data.
"No veteran who fought for our nation should have to fight for a job when they come home," Obama said in a written statement after the vote that also called on Congress to approve additional jobs proposals.
That didn't stop both parties from seeking political advantage in Thursday's vote.
Knowing they faced certain defeat in the Democratic-led chamber, Republicans nonetheless tried amending the bill with a giant package they said would create jobs by cutting income tax rates, repealing Obama's health care overhaul and blocking or annulling many labor, energy and environmental regulations. It was rejected by a near party-line 56-40 tally, but it created an opportunity for the GOP to demonstrate its formula for healing the economy.
Before the day's votes, Senate Minority Leader Mitch McConnell, R-Ky., sarcastically congratulated Democrats for "doing something we haven't been doing enough of around here. We're going to legislate." He said Democrats usually spend their time "trying to make Republicans look bad."
At the same time, Obama's campaign emailed supporters, urging them to pressure lawmakers to vote for the measure.
"Members of Congress will have two clear options to choose from: Do something to create jobs for veterans returning from overseas, or do nothing," the email said.
Outside groups also vied for attention. The Association of American Railroads said one-fifth of the railway workers hired this year were expected to be veterans, while the trade group Associated Builders and Contractors said repealing the withholding law would remove uncertainty clouding long-term planning by construction companies.
Economists say repealing the withholding requirement would have an imperceptible, if any, impact on jobs.
Beyond increasing to $9,600 the tax credit for hiring disabled veterans, the bill also would create new tax credits of up to $5,600 for employers hiring veterans who have job hunted at least half a year and $2,400 for those out of work for four weeks or more.
In addition, it would expand education and job training benefits for veterans, improve employment counseling they receive while still in the military and provide an extra year of job services for disabled veterans.
"This bill is a win for the economy and the right thing to do for our veterans," said Senate Finance Committee Chairman Max Baucus, D-Mont., a long-time sponsor of tax credits for vets.
Overall, the tax breaks and jobs programs for veterans would cost just over $1 billion, Democratic aides said. It would be paid for by extending a fee the Veterans Affairs Department charges to back home loans.
Annulling the withholding law would cost the government $11.2 billion over the next decade. The legislation makes up the lost revenue by making it harder for some Social Security beneficiaries to qualify for Medicaid, the federal-state health program for low-income people.
Associated Press writer Erica Werner contributed to this report.