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Senate OKs tax breaks for companies hiring unemployed

WASHINGTON - Senate Democrats delivered the first of several promised election-year jobs bills yesterday, passing a measure blending tax breaks for companies that hire unemployed workers with highway funding eagerly sought by the states.

The bipartisan 70-28 vote sends it to the House, where many Democrats say it is too puny - and where a revolt was brewing among lawmakers who said its allocation of highway money among the states is unfair. But pressure is on to pass it anyway to score a needed win for President Barack Obama and a Democratic Party that's dropped badly in opinion polls and faces major losses in midterm elections.

It's the first major bill to pass the Senate since the Christmas Eve passage of a deeply controversial health care bill and the subsequent election of Massachusetts Republican Scott Brown, which rocked Democrats by showing their falling standing even among voters who tend to vote Democratic.

Democrats promise additional measures to create jobs, promising help for small businesses having trouble getting loans, aid for cash-strapped state governments, and subsidies for people who make their homes more energy-efficient. But budget deficits are a worry, and future measures are going to be more difficult to pass.

The bill contains two major provisions. First, it would exempt businesses hiring the unemployed from the 6.2 percent Social Security payroll tax through December and give them an additional $1,000 credit if new workers stay on the job a full year. The Social Security trust funds would be reimbursed for the lost revenue.

Second, it would extend highway and mass transit programs through the end of the year and pump $20 billion into them in time for the spring construction season. The money would make up for lower-than-expected gasoline tax revenues.

Sen. Charles Schumer (D-N.Y.), a sponsor of the hiring tax break, said it would have an immediate impact because businesses won't have to apply for it when doing their taxes a year from now. "It immediately takes effect," Schumer said. "It goes right to small businesses."

The Senate's $35-billion proposal - blending $15 billion in tax cuts and subsidies for infrastructure bonds issued by local governments with the $20 billion in transportation money - is a far smaller measure than the $862-billion economic stimulus bill enacted a year ago.

The measure cleared a key hurdle Monday when Brown and four other Republicans broke party ranks to defeat a filibuster. Brown took considerable heat from conservative commentators and bloggers for his Monday vote, though 12 other Republicans voted for the bill yesterday. Sen. Ben Nelson of Nebraska was the only Democrat in opposition.

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