The idea, by Senator Chuck Schumer, Democrat of New York, and Senator Orrin G. Hatch, Republican of Utah, is regarded as more workable than Obama’s plan for tax credits of up to $5,000 for new hires because it is simpler and gets the tax breaks to businesses faster.
The rest of the measure contains mostly last year’s unfinished business, including renewal of business tax breaks that have expired, an extension of unemployment benefits and health insurance subsidies, and a delay in a cut in Medicare payments for doctors.
The jobs bill is politically important for Democrats seeking to respond to public anxiety about the economy. But the measure also has a lot of pull, with an assortment of lobbying groups seeking to extend these tax breaks and other benefits that are expiring.
The measure ignores some of Obama’s ideas, including the per-job tax credit, a $250 payment to Social Security recipients, and $25 billion to help cash-strapped states.
Instead, the cornerstone of the plan would be the Social Security payroll tax exemption. A recent Congressional Budget Office report estimates that the idea could create up to 18 jobs per $1 million in tax relief, a more efficient way to boost hiring than provisions in last year’s $862 billion economic stimulus bill.
The $10 billion plan could create perhaps 50,000 to 90,000 jobs through September and another 80,000 to 180,000 jobs next year, the report said.
The overall measure would cost roughly $80 billion, said Mitch McConnell, the Senate minority leader and a Republican of Kentucky.
Many elements would be financed by a variety of provisions closing tax loopholes such as one enjoyed by paper companies that get a credit from burning a dirty pulp-making byproduct known “black liquor’’ as though it were an alternative fuel.
The bill would also raise about $7 billion from a crackdown on international tax cheaters, an issue the Internal Revenue Service and the Obama administration have embraced.
