The U.S. House approved a bill granting tax credits to companies that hire the unemployed. But like most things in Washington, the story doesn’t end there.
First, before discussing the politics of the bill, let’s describe the key proposals. Employers who hire the unemployed will receive:
- An exemption from the 6.2% Social Security payroll tax for each worker hired through December, and
- An additional $1,000 tax credit per worker if new workers stay on the job a full year.
As they say in the late-night infomercials, “But wait — there’s more.” And that’s not necessarily good.
The current bill, at $35 billion, is a modification of one the House had passed in December with $50-billion price tag, including a six-month extension of jobless aid.
The Senate pared that to a smaller measure. The House amended the Senate’s measure to conform with so-called pay-as-you-go budget rules requiring future spending increases or tax cuts to be paid for with either cuts to other programs or equivalent tax increases.
That tweak means the bill will have to go back to the Senate for approval — or further modification — before President Obama get his chance to sign off on the measure. All of that means we’re probably looking at a minimum of a few more days before the bill becomes law.