Hatch Supports Jobs Legislation That Includes Payroll Tax Cut He Authored

Press Release

U.S. Senator Orrin Hatch, R-Utah, praised a provision included in jobs legislation that overwhelmingly passed the Senate today, while also expressing deep concern over the highly-divisive partisan politics that threatened its passage.

"The most critical issue confronting our nation today is our near ten-percent unemployment rate that is crippling hard-working middle class families and small businesses in Utah and across the country," said Hatch. "The payroll tax cut that is the center piece of this bill is a targeted, reasonable way to get employers hiring again. This is a conservative approach to help put our economy back on track through tax relief not more government spending."

Hatch and Senator Chuck Schumer (D-New York) drafted the payroll tax cut as a standalone proposal to spur job-creation. The provision would allow any private-sector employer that hires a worker who had been unemployed for at least 60 days to not have to pay the employer's share (6.2 percent) of the Social Security payroll tax on that employee for the remainder of 2010.

"But this victory is bittersweet. Because while I'm pleased the Senate overwhelmingly passed this critical job-creation proposal, this legislation fell prey to highly-partisan tactics by the majority that undermined a broader bipartisan compromise to get our economy moving again," continued Hatch. "It didn't have to be that way and I hope the majority learns to abide by bipartisan agreements that were worked on in good faith. Allowing political gamesmanship to kill must-pass legislation that included $45 billion in tax relief is not what the American people expect of their elected officials."

Hatch worked alongside Senate Finance Committee Chairman Max Baucus (D-Montana) and Senator Chuck Grassley (R-Iowa) to put forward a broader, bipartisan compromise job creation proposal that included $45 billion in must-pass tax relief, including the research tax credit that Hatch has long championed. Only hours after the compromise legislation was unveiled, Senator Majority Leader Harry Reid (D-Nevada) chose to scrap the bill, moving forward instead with a scaled back proposal that included Hatch's payroll tax cut, while also blocking any attempt by Republicans to add their ideas to the proposal. In protest of the Democrats' heavy-handed tactics, Hatch opposed a procedural hurdle put forward by the Majority Leader to block any Republican amendments. Once the legislation cleared that hurdle, Hatch voted in support of the underlying bill, which included the payroll tax cut that Hatch authored with Senator Schumer.

Hatch cited five main virtues of the payroll tax cut that make it a sound way to spur job creation:

* Simple. This proposal is not only easy to explain, but easy to administer -- avoiding waste, fraud and abuse.
* Focused. It is exclusively focused on hiring unemployed workers.
* Front-loaded. It provides an incentive for businesses to hire workers earlier in the year.
* Immediate. It puts money into a business to start hiring immediately.
* Affordable. It will cost substantially less than other proposals.

Unlike various other tax credit proposals, the Schumer-Hatch payroll tax holiday would go immediately to a business' bottom line -- there would be no waiting until 2011 to receive a tax credit. As an additional incentive, for any qualifying worker hired under this initiative that the employer keeps on payroll for a continuous 52 weeks, the employer is eligible for an additional non-refundable $1,000 tax credit after the 52-week threshold is reached, to be taken on their 2011 tax return. In order to be eligible, the employee's pay in the second 26-week period must be at least 80 percent of the pay in the first 26-week period.

Workers hired after the date of introduction are eligible for the payroll tax forgiveness and the retention bonus, but only wages paid after the date of enactment receive the exemption from payroll taxes.

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