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House Republicans warm to a piece of Obama’s jobs plan

The Republican-led House this week takes up the one element of President Obama’s jobs proposal that has bipartisan support in Congress — deferring a 3% tax on companies contracting with the government — but is likely to vote to repeal the levy altogether.

The provision may not lend itself to easy campaign slogans. But targeting the 3% withholding rule, which is scheduled to take effect Jan. 1, 2013, is one bit of Obama’s $447-billion jobs package that Republicans have embraced. The Senate came three votes shy of advancing its repeal last week.

“House Republicans are serious about making sure America is a place for opportunity, and that is why we are focused on ideas supported by the president and Democrats in Congress that will create jobs and return economic growth,” said Rep. Eric Cantor (R-Va.), the House majority leader.

Republicans are eager to show voters they are making progress on the jobs front after standing in unified opposition to much of Obama’s jobs proposal.

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The House will take up the issue while Obama is on a three-day swing through the West to campaign for his plan’s more popular provisions, such as money to hire teachers and firefighters and rebuild roads and schools. Republicans are countering the president’s trip with legislation this week to allow more copper mining in Arizona, which they say will create jobs.

House Republicans have declined to consider the president’s jobs package, and unanimous Senate Republicans have used a parliamentary maneuver to stop it from advancing. Republican-led opposition in the Senate also halted a provision that would send $35 billion to states to help keep teachers and firefighters on the job.

Republicans oppose spending federal dollars because they do not believe it will spur the economy. They also oppose the Democrats’ proposal to tax people making more than $1 million a year to pay for the plan, arguing that some of those earners are small-business owners. A few Democrats have joined Republicans in opposition.

“We are not going to get this economy going by continuing to shower money on the public sector,” Sen. Mitch McConnell of Kentucky, the chamber’s Republican leader, said over the weekend on CNN’s “State of the Union.”

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When the Senate returns from this week’s recess, it is expected to take up the next element of Obama’s package: a $60-billion proposal to repave roads and highways and launch an infrastructure bank to lend money for other construction projects.

Polls show that is also a popular proposal, but it may run into GOP resistance.

The withholding tax offers one area of bipartisan accord. The business community has fought the levy since it was tucked into a 2005 tax bill during President George W. Bush’s administration. Its enactment has been postponed ever since.

Companies argue that their profit margins are often so small that letting the federal government take a 3% cut from payments would hurt their bottom line. Obama has proposed postponing the tax again, until Jan. 1, 2014.

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Republicans are seeking to repeal the tax. Their proposal in the Senate drew support from 10 Democrats, although others opposed it because of GOP insistence that the lost tax revenue be recouped by spending cuts elsewhere. It fell shy of the 60 votes needed to break a filibuster.

In the House, the proposal could run into similar Democratic opposition. Republicans are seeking to cover the $11 billion in lost revenue by reducing the number of people who qualify for Medicaid and other health programs. Still, the Republican majority is expected to pass the bill easily.

lisa.mascaro@latimes.com


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