Reid rejects bipartisan jobs bill endorsed by White House

Jon Ward Contributor
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Senate Majority Leader Harry Reid on Thursday scrapped a bipartisan jobs bill unveiled hours earlier that had been endorsed by the White House, in a jarring miscommunication between the Obama administration and Democratic congressional leaders.

Reid said Thursday afternoon that he would not introduce a bill made public Thursday morning by Senate Finance Committee Chairman Max Baucus, Montana Democrat, and ranking committee member Sen. Charles Grassley, Iowa Republican.

The Democratic leader of the Senate abandoned the bill after hearing complaints from within his own caucus, but only after the White House had already endorsed the Baucus and Grassley bill in the early afternoon.

Before Reid’s about-face, White House press secretary Robert Gibbs released a statement saying the president was “gratified” by the release of the bipartisan legislation, saying the bill “includes several of the president’s top priorities for job creation.”

“The president looks forward to working with members from both parties on this bill,” said Gibbs in the statement.

But Reid said he was going with a “slim-downed” jobs bill, one costing about $15 billion over 10 years as opposed to the $85 billion price tag attached to the Baucus and Grassley bill.

A Reid spokesman said the mixed signals were not the result of any disagreement between the leader and the White House. The White House did not reply when asked if they supported Reid’s change.

The Baucus and Grassley bill had come under some criticism immediately upon its release for including $66 billion in “extenders”: the extension of unemployment benefits, expiring tax provisions, and payments to medical providers under Medicare.

Much of the opposition came from within the Democratic caucus.

“I would prefer a jobs bill that simply focused on job-creating initiatives. This bill has become something more than that,” said Sen. Byron Dorgan, North Dakota Democrat, according to The Hill.

Some Republicans had already begun on Thursday to hone criticisms of the bill, saying that for a jobs bill it was not all that focused on actual job creation.

“While some reports have described this legislation as a jobs bill, it is far more accurately described as an extenders bill, nearly entirely focused on extending current assistance programs for unemployed Americans and extending current tax policy,” said Brad Dayspring, a spokesman for House Minority Whip Eric Cantor, Virginia Republican.

A Reid spokeswoman, in explaining the decision to scrap the bigger, more expensive bill, said the majority leader “did not want to bog down this process.”

“This simplified bill allows us to move quickly in our efforts to pass legislation that will create jobs this year,” said Regan LaChapelle, adding that “it was unclear how much Republican support we would have gotten for a bigger bill.”

But Grassley spokeswoman Jill Kozeny said that Reid had spiked the bipartisan bill “just as Republican senators were saying they liked things in the Baucus-Grassley draft.”

“Senator Reid’s announcement sends a message that he wants to go partisan and blame Republicans when Senator Grassley and others were trying to find common ground on solutions to help get the economy back on track and people back to work,” Kozeny said. “The majority leader pulled the rug out from work to build broad-based support for tax relief and other efforts to help the private sector recover from the economic crisis.”

Reid spokeswoman LaChapelle said there is there is “no reason” that the smaller version “shouldn’t pass with overwhelming bipartisan support.”

She also said that Reid plans to pass “additional jobs bills throughout the year.”

Neither the White House nor Reid’s office would comment on why there was such an unusual mixup, with the majority leader rejecting a piece of legislation within hours of the White House publicly embracing it.

But one House Democratic aide remarked of the Senate: “Who knows what’s going on there.”

“The fact is that a bipartisan bill was introduced that won praise from both sides of Pennsylvania Avenue — then it was blown up out of the blue,” said a Republican Senate leadership aide.

The core components of the Reid bill — which won’t be introduced until the Senate returns from its week-long Presidents Day recess the week of Feb. 22 — are as follows (as provided by Reid’s office):

  • Jobs Payroll Tax Exemption: offers an exemption from social security payroll taxes for every worker hired in 2010 that has been unemployed for at least 60 days. There would be an additional $1,000 income tax credit for every new employee retained for 52 weeks to be taken on the employer’s 2011 income tax return ($13 billion over 10 years).
  • Section 179 Expensing: helps small businesses grow by allowing them to write off more expenditures ($35 million over 10 years).
  • Highway Trust Fund Extension: extends existing highway programs which provide states and localities with the certainty they need to make decisions on projects. It allows for billions more to be invested in infrastructure throughout the nation and saves one million jobs.
  • Expanding Build America Bonds: allows state and local governments to borrow at lower costs to finance more infrastructure projects and put people to work ($2 billion over 10 years).