Senate Democrats try new tack on jobs, push bill without millionaire surtax

Senate Democrats are employing a new tack in trying to pay for planks of President Obama’s jobs agenda, after attempts to raise taxes on millionaires hit a wall of Republican opposition.

On Friday, a trio of Democrats announced that the Senate would take up a measure, probably next week, that would give companies financial incentives for hiring veterans. 

But instead of paying for the legislation with a surtax on millionaires, Democrats propose paying for it with budget offsets from other veterans’ initiatives. 

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The veterans’ legislation is also expected to be attached to a GOP priority — a House-passed measure that would repeal a yet-to-be-implemented requirement that federal, state and many local government agencies withhold 3 percent of certain payments to contractors.

With all that in mind, Democratic Sens. Patty Murray (Wash.), Debbie Stabenow (Mich.) and Jon Tester (Mont.) told reporters Friday that they were hopeful that Republicans would jump on board with the veterans’ legislation.

It’s expected to pass. It should pass, Stabenow said, saying the legislation is meant to ensure that veterans would not stand in the unemployment line.

Tester said it shouldn’t “surprise anyone that this package has ideas from both Republicans and Democrats.

The change in Democratic strategy comes after every Senate Republican, as well as a handful of Democrats, voted against jobs initiatives paid for by tax hikes on millionaires.

Tester was one of only two Democrats in the Senate to oppose the president’s broader $447 billion jobs plan.

On Thursday, an infrastructure proposal plucked from that package failed to clear a procedural vote in the upper chamber. A plank to save or create teaching and law enforcement jobs has also been shot down by the Senate.  

The Senate veterans’ bill, on the other hand, melds proposals from Murray, chairwoman of the Senate Veterans Affairs Committee; Rep. Jeff Miller (R-Fla.), chairman of the House Veterans Affairs Committee; and Obama. 

It includes tax credits for businesses that hire veterans, including up to $5,600 for bringing on a former service member who has sought a job for more than six months. Companies can receive as much as $9,600 in tax credit for hiring a veteran disabled in the line of duty who has been looking for a job for at least six months.

The measure also expands vocational rehabilitation benefits for veterans. 

“For too long in this country we have patted our veterans on the back for their service and then pushed them out into the job market alone,” Murray said in a news release. “With this bill we are giving our veterans the job skills to get their foot in the door and incentivizing employers to make sure that door is open to them.”

The measure would be offset by keeping the current fee structure for certain veterans’ home loans. The House used a similar offset when it passed, 418-6, the veterans’ jobs legislation pushed by Miller. 

Democrats plan to attach the veterans’ bill to the repeal of the 3 percent withholding provision, which also passed the House overwhelmingly and has broad bipartisan support. 

Republicans and business groups have been pressing Senate Democrats to pass that House measure, noting that the Obama administration backs both the repeal and the House pay-for, a change in Medicaid eligibility requirements. 

The White House had previously included a one-year delay of the 3 percent rule in the broader jobs package. 

But Senate Democrats have signaled this week that they may change the House offset and make other alterations to the repeal measure.

The 3 percent provision, which was enacted to help battle tax evasion among federal contractors, was passed more than five years ago but has yet to go into effect. After a couple of delays, the rule is currently set to go live in 2013. 

— This story was originally posted at 12:48 p.m. and has been updated.