Obama’s Jobs Bill Derailed in Senate

October 13, 2011

The Senate voted 51 to 48 on a procedural motion to block President Barack Obama’s $447 billion jobs bill. Despite falling short of the 60 votes required, this move now clears the way for the White House to refocus on pressuring Congress to pass smaller pieces of the package.

All of the Republicans present on Tuesday voted against the motion and two Democrats, Sens. Ben Nelson (Neb.) and Jon Tester (Mont.) sided with Republicans in opposing the motion. A handful of other Democrats who had concerns with the bill, including Sens. Jim Webb (Va.) and Joe Manchin (W.Va.), voted to proceed to debate but with the understanding that they would have voted against the bill itself. Majority Leader Harry Reid (D-Nev.) originally voted in favor, but changed his vote to ‘no’ in a procedural move to keep open the option of raising the issue again without filing for cloture.

Obama’s bill was a mix of tax cuts and new spending aimed at spurring job creation in the short term. The bill, the American Jobs Act (S. 1660) would have: cut payroll taxes in half for both workers and employers in 2012; eliminated payroll taxes for businesses that hire individuals who have been unemployed for more than six months; extended unemployment insurance benefits; and provided $175 billion for transportation infrastructure and school modernization projects.

The bill included a 5.6 percent surtax on households earning more than $1 million per year as a way to pay for the package. Obama’s bill originally proposed raising taxes on people with an annual salary of $200,000, but Majority Leader Reid upped the income level to bring reluctant Democrats on board with the offset.

Following the vote, the President said that it was not the end of the fight, but indicated the jobs bill as a package would be broken up into parts. He said he would work with Senate Majority Leader Harry Reid “to make sure that the individual proposals in this jobs bill get a vote as soon as possible…”

Meanwhile, House Majority Leader Eric Cantor (R-Va.) also stated he plans to move smaller pieces of other iterations of the American Jobs Act (H.R. 12, S. 1549) that could be agreed to on a bipartisan basis, specifically citing repeal of a three-percent withholding rule for federal contractors, three regional trade pacts, repeal of “onerous” regulations, and improving small-business access to capital. He went on to say that while he welcomed a breakup of Obama’s bill, the proposed tax increase on the wealthy is a “nonstarter.”