Senate passes jobs package, eyes next round

WASHINGTON Wed Feb 24, 2010 2:44pm EST

A man waits to have his resume critiqued for free at the NYCHires Job Fair in New York February 24, 2010. REUTERS/Shannon Stapleton

A man waits to have his resume critiqued for free at the NYCHires Job Fair in New York February 24, 2010.

Credit: Reuters/Shannon Stapleton

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WASHINGTON (Reuters) - The Senate passed a modest jobs-creation bill on Wednesday and laid the groundwork for a larger package that would advance Democrats' goal of bringing down the stubbornly high U.S. unemployment rate.

By a 70-28 vote, the Senate approved a $15 billion package of tax breaks and highway spending and sent it on to the House of Representatives, which could approve the measure quickly for President Barack Obama to sign into law.

Immediately after the vote, Senate Majority Leader Harry Reid said he was readying a package of jobless benefits, state aid and tax breaks that the Senate could take up next week.

Democrats are also preparing a bill to boost lending to small businesses that could use money left over from bank bailout, he said.

"Today's progress is a small step forward, and an important step forward," Reid said. "We have other things in mind."

The vote provided a much-needed victory ahead of the November congressional elections for Obama and his fellow Democrats, who say their top priority this year is to bring down the 9.7 percent unemployment rate.

The vote, in which 13 Republicans joined 55 Democrats and two independents, masked partisan tensions that had earlier threatened to derail the bill.

Among the supporters was newly minted Republican Senator Scott Brown, whose surprise election last month gave his party enough seats to block Democratic legislation. On this measure, at least, he sided with Democrats.

The House has already passed a substantially different $155 billion jobs bill, but analysts say that chamber is likely to take up the Senate version to ensure that a highway-construction fund is not disrupted.

Democrats face a growing voter backlash over the aggressive spending measures they took last year to combat the worst recession in 70 years. Reid plans to pass a series of smaller jobs bills that would avoid the sticker shock of the larger House bill and keep their job-creating efforts in the news.

But the next bill could carry a much higher price tag. Extending jobless benefits for an entire year, as Reid intends, would likely cost more than $100 billion.

He has also begun to characterize as "jobs bills" other legislation not directly aimed at boosting the economy, such as the massive healthcare reform effort now stalled in Congress.

The bill passed by the Senate includes a $13 billion payroll tax break for businesses that hire unemployed workers, along with subsidies for state and local construction bonds.

It also extends the highway-construction fund through the end of the year, which some Republicans have warned could lead to long-term spending increases not reflected in the legislation's official cost.

The bill's costs, other than the highway construction fund, are offset by a crackdown on offshore tax shelters.

(Additional reporting by Thomas Ferraro; editing by Mohammad Zargham and Vicki Allen)

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