Harry Reid scales back Senate jobs bill, reflecting voter anger

Senate majority leader Harry Reid said Thursday that he's focused on passing a smaller jobs bill than President Obama had hoped for.

Senator Reid's move, backed by fellow Democrats in the Senate, still raises the prospect that a jobs bill can pass the Senate this month – a top priority for President Obama.

But he rejected a larger bill outlined earlier Thursday by Democrat Max Baucus of Montana and Republican Charles Grassley of Iowa, senior members of the Senate Finance Committee. The shift in tactics signals that lawmakers are deeply aware of a restive electorate – wanting genuine job creation but also a closer watch on federal budget deficits.

Major differences with House bill

The Senate plan differs in significant ways from a House "Jobs for Main Street" bill passed in December. It is smaller and more focused on the private sector, rather than on direct spending by federal and state governments.

Both bills, however, seek to aid a US job market that remains weak despite a major stimulus package passed a year ago. The goals include spurring private-sector job creation and accelerating public works projects.

The lower Senate price tag reflects a rising public focus on the risks of large federal deficits. The focus on incentives for private companies also suggests that Congress is responding to signals of voter frustration with government.

New political calculus

In the weeks since the House passed its bill, Republican Scott Brown staged an upset win in the race to become a US senator from Massachusetts. And a new poll Thursday finds many Americans angry with the way government is working.

Confronting a criticism that has been leveled at the original Obama stimulus, Senator Reid said that the emerging Senate plan "will create jobs immediately." At the same time, he said the Senate bill would cut out some of the elements negotiated and announced earlier in the day by Sens. Baucus and Grassley.

Those included extensions of some sizable tax cuts that expired last year. Even the Baucus-Grassley bill would cost less than the House measure, passed in December. But Reid's calculation appears to be that the mood of the moment calls for a bill that is lean and squarely focused on jobs.

How House and Senate bills differ

Here's the plan Reid outlined, followed by an outline of the House bill.

SENATE JOBS BILL

• A $13 billion hiring incentive, by offering an employer exemption from Social Security payroll taxes for every unemployed worker hired in 2010. The centerpiece of Reid's plan, this has some Republican support.

• More "Build America" bonds for projects such as local schools. Reid cited this as a "successful" element of Obama's initial stimulus package.

• A one-year highway bill extension.

• Speedy tax write-offs for small-business expenses.

HOUSE JOBS BILL

• Infrastructure spending of $48.3 billion for roads, bridges, modernized public buildings, and clean water.

• Aid to local governments totaling $26.7 billion. Proponents say that with states and cities facing a severe budget crunch, this would reduce job losses in the ranks of teachers, firefighters, police officers, and other public employees.

• Help for the unemployed and for working families, at a cost of $79 billion. Most of this would go toward extended unemployment insurance and COBRA health benefits for jobless Americans.

• Other provisions including a highway-bill extension.

By simplifying the Senate bill, Reid said he was leaving other matters to be considered in other bills – such as an extension for unemployment insurance and various tax breaks. The leaner bill pleased some Democrats who didn't like elements of the Baucus-Grassley plan.

Reid's move also allowed him to throw down an election-year challenge to Republicans at a time when the job market is a leading voter concern.

"Republicans are going to have to make a choice," he said, either to support his plan or explain why they didn't.

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