Senate approves jobs bill

WASHINGTON -- Companies that hire unemployed workers will get a temporary payroll tax holiday under a bill that easily won final congressional approval Wednesday.

The bipartisan 68-29 vote in the Senate sends the legislation to the White House, where President Obama is expected to sign it today.

It will be the first of several election-year jobs bills promised by Democrats to be enacted into law, though there's plenty of skepticism that the measure will do much to actually create jobs. Optimistic estimates predict the tax break could generate perhaps 250,000 jobs through the end of the year, but that would be just a tiny fraction of the 8.4 million jobs lost since the start of the recession.

The measure is part of a campaign by Democrats to show that they are addressing the nation's unemployment problem, but that message was overshadowed by Congress' feverish final push to pass health care overhaul legislation by this weekend.

The bill which passed Wednesday contains about $18 billion in tax breaks and a $20 billion infusion of cash into highway and transit programs. Among other things, it exempts businesses that hire the unemployed from paying the 6.2 percent Social Security payroll tax through December and gives employers an additional $1,000 credit if new workers stay on the job a full year. Taxpayers will have to reimburse Social Security for the lost revenue.

The measure is modest compared with last year's $862 billion economic stimulus bill, and the bulk of the hiring tax breaks would probably go to companies that were likely to hire new workers anyway.

"Most businesses that are going to be able to take the credit were probably going to hire the worker anyway," said Bill Rys of the National Federation of Independent Business, which lobbies for small business. "Until business picks up for small business owners, there's not going to be a huge incentive to add new workers."

The Senate vote came as the House Ways and Means Committee approved a bill that lawmakers hope will generate jobs through infrastructure spending and tax cuts for investing in some small businesses. The bill would exempt long-term investments in certain small businesses from capital gains taxes, and would expand the Build America Bonds program, which subsidizes interest costs paid by local governments when they borrow for construction projects.