US House adopts $15-bn plan to spur job creation

The House on Thursday approved a $15-billion measure intended to spur job creation by granting tax breaks to businesses that hire workers.

The House on Thursday approved a $15-billion measure intended to spur job creation by granting tax breaks to businesses that hire workers.

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The centerpiece of the legislation is a plan to exempt businesses that hire people who have been out of work for at least 60 days from paying the 6.2 per cent payroll tax on those staff through year-end. It also grants a $1,000 tax credit if workers are kept on for a full year.

However, opinion is divided on whether the approach is effective or simply gives businesses a break on workers they would have hired anyway. Lawmakers said that given the dismal unemployment picture, they were willing to give the proposal a try, and estimated that tax breaks would put 300,000 people to work.

Democrats, trying to show that Congress was doing something about stubborn unemployment, characterised the measure, which also funneled an extra $20 billion into road and bridge construction, as just the first step in a broad legislative push to bolster the economy and encourage hiring.

Representative Bob Etheridge said the bill was “really all about our three most important priorities in this Congress: jobs, jobs, jobs.” He estimated that the measure could create one million jobs.

Democrats are eager to score some victories on job-related legislation even as they continue to be preoccupied with the fate of their health care overhaul. The bill passed by the House, which also extends the federal highway programme and provides subsidies for public works bonds, was scaled back from a much larger measure in the Senate, to speed it through.

Democrats had intended to focus on job-creating measures this year but that plan has been disrupted by the continuing fight over the health care overhaul.