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The Senate Jobs Bill Is Dead, Long Live The Senate Jobs Bill

February 11, 2010 - by Eric Naing

Fresh off a meeting with Senate Democrats, Senate Majority Leader Harry Reid [D, NV] is rewriting the Senate jobs bill, excising many of the tax cuts previously included to draw Republican support.

In recent days, the shape of the bill has sparked an intra-party fight among Senate Democrats. Originally crafted by Sen. Dick Durbin [D, IL] and Sen. Byron Dorgan [D, ND], the process was hijacked by the Senate Finance Committee.

Sen. Max Baucus [D, MT] and Sen. Chuck Grassley [R, IA], two leading members of the committee, today released a draft of their own jobs bill dubbed the Hiring Incentives to Restore Employment, or HIRE, Act. This bill contains the provisions I wrote about earlier today including the renewal of $31 billion in expiring tax provisions.

But now the Hill is reporting that Sen. Reid is rewriting the bill and in the process will strip away those tax cuts leaving four main provisions:

Tax credits for employers who hire new workers; a provision allowing businesses to write off the cost of capital investments; Build America Bonds, which allow state and local governments to lower their borrowing costs; and a one-year extension of funding for transportation programs in the Surface Transportation Act.

Further outraging liberal Democrats is a promise made by Baucus to move ahead with reforms on the gift and estate tax in exchange for Republican support. Ezra Klein says these two reforms would cost “many hundreds of billions of dollars” and would amount to “massive tax cuts for the rich.”

Reid’s decision to dump the GOP-friendly goodies may assuage jittery liberals but it remains to be seen whether he can now convince at least one Republican, let alone conservative Democrats like Baucus, to vote for the pared down bill. Remember, a Republican filibuster means 60 votes are needed to pass the bill.

One solution, of course, may be to pass it through the infamous reconciliation process that requires only 51 votes.

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