House Passes Small Part of Obama’s Jobs Bill
By JENNIFER STEINHAUER
WASHINGTON — The House passed a small component of President Obama’s jobs package on Thursday, voting by a big margin to repeal a requirement that governments withhold 3 percent of payments to contractors to insure that they properly withhold taxes from their employees.
The Republican-controlled House offset the cost of repealing the requirement with another bill, which also passed Thursday, that reduces federal spending on Medicaid under the 2010 health care law.
While the withholding requirement passed several years ago, it had yet to go into effect.
If it had been allowed to, it would mean “huge accounting burdens on governments and potentially harmful cash-flow disruptions for suppliers, contractors and subcontractors,” said Representative Eric Cantor, Republican of Virginia, the majority leader, on the House floor. “Those are dollars that could otherwise be used to grow a business or hire more workers.”
The withholding bill, the first among so-called jobs bills that Republicans and Democrats have been able to agree upon, would repeal a requirement for federal, state and local government agencies to withhold 3 percent of certain payments to companies doing business with the government and to deposit the money with the Internal Revenue Service.
This requirement was originally adopted as a tax-compliance measure, and the Congressional Budget Office said its repeal would reduce federal revenues by $11 billion over 10 years. The measure passed 405 to 16, with only Democrats opposing.
More controversial was the measure that was meant to compensate for the projected loss in revenues.
That bill was intended to fix an apparent error in the health care law, under which hundreds of thousands of middle-income early retirees can get nearly free Medicaid coverage meant for the poor. While the administration has acknowledged that the coverage was unintended when the legislation was written, it is popular among many Democrats who believe it is a way for retirees who cannot afford health care plans to obtain them.
“I don’t care if the president is going to sign this bill,” said Representative Joseph Crowley of New York, who argued vociferously against the bill on the House floor. “That doesn’t make it right.”
That measure passed 262 to 157, with all nays coming from Democrats, although 27 of them voted in favor of the bill. While the withholding bill enjoys broad support in the Senate, the measure to address the Medicaid costs may also meet resistance among Democrats in that chamber, where odds still favor the entire package passing.
The Republican-controlled House offset the cost of repealing the requirement with another bill, which also passed Thursday, that reduces federal spending on Medicaid under the 2010 health care law.
While the withholding requirement passed several years ago, it had yet to go into effect.
If it had been allowed to, it would mean “huge accounting burdens on governments and potentially harmful cash-flow disruptions for suppliers, contractors and subcontractors,” said Representative Eric Cantor, Republican of Virginia, the majority leader, on the House floor. “Those are dollars that could otherwise be used to grow a business or hire more workers.”
The withholding bill, the first among so-called jobs bills that Republicans and Democrats have been able to agree upon, would repeal a requirement for federal, state and local government agencies to withhold 3 percent of certain payments to companies doing business with the government and to deposit the money with the Internal Revenue Service.
This requirement was originally adopted as a tax-compliance measure, and the Congressional Budget Office said its repeal would reduce federal revenues by $11 billion over 10 years. The measure passed 405 to 16, with only Democrats opposing.
More controversial was the measure that was meant to compensate for the projected loss in revenues.
That bill was intended to fix an apparent error in the health care law, under which hundreds of thousands of middle-income early retirees can get nearly free Medicaid coverage meant for the poor. While the administration has acknowledged that the coverage was unintended when the legislation was written, it is popular among many Democrats who believe it is a way for retirees who cannot afford health care plans to obtain them.
“I don’t care if the president is going to sign this bill,” said Representative Joseph Crowley of New York, who argued vociferously against the bill on the House floor. “That doesn’t make it right.”
That measure passed 262 to 157, with all nays coming from Democrats, although 27 of them voted in favor of the bill. While the withholding bill enjoys broad support in the Senate, the measure to address the Medicaid costs may also meet resistance among Democrats in that chamber, where odds still favor the entire package passing.
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