WASHINGTON — Companies hiring unemployed workers will be able to take a credit on payroll taxes under the jobs bill signed into law Thursday by President Obama. The bill passed the Senate the day before in a 68-29 vote.
"It is the first of what I hope will be a series of jobs packages that help to continue to put people back to work," Obama said. "I also want to say to the Republicans who voted for this bill that I appreciate their willingness to work with Democrats in a bipartisan fashion to get America moving again."
The measure exempts businesses hiring the unemployed from paying the 6.2% Social Security payroll tax through December 2010, and offers an additional $1,000 tax credit per worker if the new hires stay on the job a full year.
The bill may create as many as 250,000 full-time jobs by the end of 2010, according to the Congressional Budget Office (CBO), at a cost of about $18 billion. The bill also includes $20 billion for highway and transit programs, to make up for decreased gasoline-tax revenues and fund summer construction projects.
Critics of the bill say that the tax credit will likely help businesses that were already looking to hire. "Until business picks up for small-business owners, there's not going to be a huge incentive to add new workers," National Federation of Independent Business (NFIB) spokesman Bill Rys told the Associated Press.
Congress is also prepping a $150 billion bill that would extend unemployment insurance and COBRA healthcare insurance subsidies, as well as a measure that promises to loosen credit and spur new small-business investment.
"This is just the first [and] certainly not the last piece of legislation that we will put forward in relation to jobs," said Senate sponsor Charles Schumer (D-N.Y.). "If we don't create jobs, the economy will not move forward."