The House has approved a plan that would spend $15 billion on measures targeted at job creation. The plan would give tax breaks to businesses as an incentive to hiring new employees. Supporters of the plan claimed that it would end up creating 1 million jobs.
The plan, which has already been approved by the Senate, would also pump in $20 billion into construction as a way of further stimulating the economy and increasing jobs. However, the measure was opposed by most of the House Republicans, and passed narrowly with 217 votes in favour and 210 against it.
The legislation would offer a tax break to businesses that hire people who have been unemployed for 60 days or more by making those businesses exempt from paying the 6.2% payroll tax until the end of 2010. If the new workers are kept on the job for longer than one year, the business would also qualify for a $1,000 tax credit.
The second part of the plan extends the federal highway fund to the end of 2010. This is aimed at funding state level and local projects for construction of roads and bridges, another step that will spur employment. The funding is likely to support hundreds of thousands of jobs throughout the country.
The plan divided opinion in the House, and attracted strong criticism from the House Republicans, and even some Democrats. This was clear from the voting pattern, as just 6 Republicans supported the plan, while 166 opposed it. Critics claim that the bill is too weak and would not have much impact on unemployment. They say that the bill would effectively end up giving a tax break to employers for hiring workers who they would have hired even in the absence of this incentive. That makes it a business tax break bill, and not a jobs bill, they say.
The lawmakers who supported the bill say that given the worrying unemployment numbers, they are willing to try anything that could help in getting people back in jobs.
Although the bill does not go as far as most people would have hoped, it is difficult to argue with the logic of trying out anything that could work. The unemployment rate stands at 9.7%, and doing nothing is not an option. The “do nothing” camp clearly needs to understand that the economic recovery is meaningless for millions out there until they can find a job.
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