The Senate on Thursday easily cleared a House Republican bill to repeal the 3 percent withholding tax.
The bill also included a Democratic amendment that would create new tax credits to incentivize companies to hire veterans.
Sen. Scott Brown (R-Mass.), the sponsor of the underlying withholding bill, hailed the cooperation that led to its passage, and suggested voters should take it as a sign that lawmakers could work through disagreements to create jobs.
Senate Majority Leader Harry Reid (D-Nev.) added after the vote that he felt “pretty good about the work we did this week.”
The Senate cleared the 3 percent withholding repeal bill by a vote of 95-0, with Sen. Olympia Snowe (R-Maine) voting present. The legislation would repeal the current requirement that governments at all levels withhold 3 percent of payments to contractors, and also scale back last year’s healthcare law to disqualify some middle-income Americans from Medicaid.
The amendment sponsored by Reid to create tax incentives for companies to hire veterans also cleared the chamber by 94-1, with Snowe voting present.
That legislation is based on, H.R. 2433, the Veterans Opportunity to Work Act, which would provide monthly payments for retraining assistance to returning veterans and also includes the tax credit Obama proposed in his jobs legislation for companies that hire veterans.
Sen. Jim DeMint (R-S.C.) cast the one dissenting vote on that amendment, explaining that lawmakers ought to be simplifying and flattening the tax code rather than creating a loophole that benefits veterans.
"We need a simpler tax code that businesses can navigate," DeMint said.
The legislation is expected to be signed into law by President Obama.