US House passes minor element of Obama jobs plan

Thu Oct 27, 2011 12:29pm EDT

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* Rare bipartisan support for economic measure

* Disagreement remains on larger elements

By Andy Sullivan

WASHINGTON, Oct 27 (Reuters) - The Republican-led U.S. House of Representatives on Thursday passed a minor element of President Barack Obama's jobs bill as consensus remained elusive on other efforts to boost the struggling economy.

With the unemployment rate stuck at 9 percent, Republicans and Democrats have lined up behind sharply different job-creation agendas.

Obama has put forward a $447 billion package of government spending and tax cuts for workers, while Republicans want to roll back pollution controls and other regulations that they say are preventing businesses from expanding.

With power divided in Washington, neither agenda is likely to become law. But both will have a long afterlife in the 2012 presidential and congressional elections, as both parties seek to convince voters that they have a better plan to create jobs.

Obama has touted his jobs plan in campaign-style rallies across the country, even though Republicans have already blocked it. Republicans, meanwhile, point out that the Democratic-led Senate has refused to take up more than a dozen bills that have passed the House.

Thursday's vote was a rare example of common ground as the House voted 406 to 16 to eliminate a yet-to-be enacted law that would withhold 3 percent of payments to government contractors.

Passed in 2006, the measure is meant to ensure that firms that do business with the government pay their fair share of taxes.

Business groups say the law, due to take effect in January 2013, unfairly punishes honest contractors and would force them to charge more to make up for the loss of cash flow and would cost more than it would save.

The Democratic-controlled Senate blocked the measure last week, but is expected to take it up again and pass it next week. The White House has said it supports the measure.

However, the two sides disagree over how to cover the bill's $11 billion cost.

By a largely party-line vote of 262 to 157, the House passed a separate bill that would save $13 billion by tightening eligibility for Medicaid, the government health insurance program for the poor and reduce subsidies in Obama's landmark health-care overhaul.

That element was included in a debt-reduction plan Obama submitted last month, and the White House said it supports passage.

Senate Democrats might try to find another way to cover the cost. "We are still working out a path forward," said Adam Jentleson, a spokesman for Senate Democratic leader Harry Reid.

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