Sen. Charles Schumer (D-N.Y.) is co-sponsoring bipartisan legislation aimed at temporarily suspending a federal payroll tax to encourage businesses to hire, he announced at a news conference in Bethpage Monday.
Under the "Hire Now Tax Cut," legislation, which Schumer is sponsoring with Sen. Orrin Hatch (R-Utah), businesses would not be required to pay their share of the Social Security tax in 2010, which amounts to 6.2 percent of their employees' wages, for people they hire this year. The companies must hire people who have been out of work more than 60 days.
Schumer, addressing a small audience of business owners, executives and unemployed workers, stressed that the cash savings would be immediate. That's in contrast to the small-business hiring plan President Barack Obama proposed more than a week ago, which includes a $5,000 tax credit to businesses for hiring and reimbursement of the Social Security payroll tax.
Schumer expects the full Senate to vote on the bill by Thursday as part of a jobs package. He said the House hasn't yet crafted comparable legislation but he is hopeful it will by next week. He is also hoping the president can sign the bill by March 1, he said. The senator estimates that a business that hires an employee for $50,000 will save about $3,000 this year. For someone hired at $100,000 a year, the savings will be about $6,000.
At least one Long Island business owner present said he liked what he heard.
"We've been hiring for 30 years," said Walter Poggi, president of Retlif Testing Laboratories, a Ronkonkoma company that tests products for military and aviation standards. "I think this is the first time we'd get a tax break for hiring. So we'd welcome that."
The company has 70 employees, including 50 on Long Island, and hopes to add two to three more here, Poggi said.
But another business owner contacted by Newsday said he would still need to see an improved economy before he hired.
"I think it's a help, but not a real inducement to hire somebody if you don't need that person," said Jack Bloom, president of the printing company Sir Speedy of Westbury.
Schumer said that if 3 million people were added to the payrolls under the Senate plan, the cost would be about $7 billion. He contrasted that with the $700 billion-plus stimulus plan that Obama signed into law early last year.
"You get a lot more bang for the buck out of this proposal," he said.
In response to a question, he said that money had been earmarked for the program in the federal budget.
Even if 3 million workers became employed, the U.S. job market would still be a long way from full strength because the country currently has 14.8 million unemployed workers.