The U.S. House of Representatives today approved bipartisan legislation to help spur job creation and make immediate infrastructure investments, taking another step toward economic recovery. H.R. 2847, the Hiring Incentives to Restore Employment (HIRE) Act, includes the House amendments to the Senate-passed bill and was approved by a vote of 217-201.
"Spurring job creation is our top priority as families in Michigan and across America continue to struggle," said Chairman Sander M. Levin (D-MI). "The Recovery Act has stemmed the downward economic spiral, but hiring has not yet resumed in earnest. The HIRE Act will add a spark for hiring and reinforces private sector growth."
The House-passed version amends the Senate bill to: ensure the bill is fully paid for, ensure that small businesses can take advantage of the payroll tax exemption, increase the bond subsidy for States, and continue requirements ensuring that a portion of the highway and transit funding goes to minority-owned businesses.
"As we take these additional steps, and recognize that we must take more steps to create jobs, we must look to the longer term. Our fiscal situation is simply not sustainable. That's why it's so important that this bill is fully paid for, largely by cracking down on offshore tax abuse," concluded Chairman Levin.
New Tax Incentives for Businesses to Hire Unemployed Workers
* Tax incentives for businesses to spur immediate job growth. A new payroll tax exemption to provide employers with incentives to hire and retain new employees. The bill provides businesses with an exemption from Social Security payroll taxes for every worker hired in 2010 who has been unemployed for at least 60 days. (The maximum value of this incentive is $6,621, which equals to 6.2 percent of wages paid in 2010 up to the FICA wage cap of $106,800.) The longer that a business has a new qualified worker on its payroll, the greater the tax benefit. The House amendments incorporate an IRS fix to make sure that small businesses can take advantage of the payroll tax holiday.
* Bonus for Keeping Employees Long Term. Provides an additional $1,000 income tax credit for every new employee retained for 52 weeks.
Spur Small Business Investments to Grow
* Small Business Expensing. Extends Recovery Act provisions that double the amount small businesses can immediately write off their taxes for capital investments and purchases of new equipment made in 2010 from $125,000 to $250,000. This will help small business make the investments they need to grow and hire more workers.
Highways and Infrastructure
* School Construction, Energy Conservation and Renewable Energy. Expands Build America Bond's successful direct payment option to include the issuers of qualified school construction bonds, qualified zone academy bonds, clean renewable energy bonds, and qualified energy conservation bonds.
* Transportation Extension. Extends surface transportation programs through December 31, 2010 to provide states and localities with the certainty they need to make decisions on capital-intensive projects and allow for billions more to be invested in infrastructure throughout the United States. It includes language continuing the application and enforcement of the minority-owned business enterprise contracting requirements for surface transportation projects.
* Avoiding a Highway Shortfall & Bolstering the Trust Fund. Transfers approximately $20 billion from the General Treasury and to the Highway Trust Fund (HTF), as the HTF is estimated to run short of funds in June. This transfer will reimburse the HTF for interest it should have collected in the past and will allow the federal government to support existing federal highway and transit programs through the end of this year at the levels authorized for Fiscal Year 2009.
* Critical to Job Creation. Every $1 billion in federal funds creates 34,700 jobs. Construction-related manufacturing is operating at 68 percent of capacity and has an unemployment rate of nearly 25 percent.
* Cracks down on Overseas Tax Havens. Provides the U.S. Treasury Department with significant new tools to find and prosecute U.S. individuals that hide assets overseas from the Internal Revenue Service. The bill would require new reporting by foreign financial institutions to give the IRS more data to detect fraud and tax evasion.
* Delaying tax break for foreign interest payments. Delays for 3 years (through 2020) a questionable tax break enacted in 2004 that would let U.S. multinational companies that have shipped jobs overseas reduce their U.S. taxes by deducting more of their worldwide interest income against their U.S. income. This provision has not gone into effect, and not one company currently utilizes this provision.
Click here for additional information, including a summary and JCT table of the amended Senate Jobs bill.