Obama set to sign jobs bill

Reporting from Washington — 

President Obama is expected to sign into law Thursday the first significant job-creation measure passed by Congress since Democrats vowed this year to attack the nation’s high unemployment rate.

The bill, passed by the Senate on a 68-29 vote Wednesday, is a $17.6-billion package intended to spur hiring by, among other things, granting employers a payroll tax holiday for the rest of the year for hiring new workers.

Obama will sign the bill in a Rose Garden ceremony. “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 all across America,” the president said Wednesday.

The measure would exempt employers from their 6.2% Social Security payroll contribution for every new employee hired through 2010, if that person had been out of work for at least 60 days. There would also be an additional $1,000 corporate income tax credit for every new employee kept for 52 weeks.

Experts are divided over whether the payroll provision will boost hiring.

The measure would also make it easier for businesses to write off equipment purchases and would authorize the transfer of $20 billion into federal highway and mass-transit funding programs, which Democrats hope will jump-start construction projects.

“This is a great day,” said Sen. Barbara Boxer (D-Calif.), who chairs the Senate Environment and Public Works Committee. “Today, a million American workers -- including 100,000 in California -- know their jobs are more secure because we have renewed the transportation bill through the end of the year.”

The bill had passed the Senate last month, but was modified by the House, so it required a second Senate vote. Eleven Republicans crossed the aisle to vote with Democrats.

The House is now considering a $140-billion package passed by the Senate last week that contains a series of industry-friendly tax breaks such as a credit for research and development as well as extensions of unemployment benefits and COBRA insurance subsidies through the rest of the year.

The Senate is expected to turn its attention to legislation that would provide struggling small businesses with increased access to credit.

The bill completed Wednesday would provide California with $3.3 billion for highway projects and $1.3 billion for public transit projects from $40-billion-plus authorized for transportation projects nationwide through the remainder of the year.

But separate legislation was approved by the House on Wednesday and sent to the Senate that would reduce the state’s share by about $192 million. It came in response to complaints from House members that the Senate bill would unfairly reserve a chunk of the money for a handful of states, including California, while some states would receive nothing.

House-Senate leaders agreed to move the separate legislation to ensure that all states receive a share of the money.

joliphant@latimes.com

Richard Simon in the Washington bureau contributed to this report.