Congress rejects President Obama's American Jobs Act.

• Author: Berger, Barrie Tabin
• Position: Federal Focus

After weeks of cajoling about how important the measure would be to help get the economy back on track, the Senate still failed to garner enough votes to move forward with President Obama's job creation plan, the American Jobs Act (S. 1660). Senate Republicans and moderate Democrats opposed the bill's infrastructure spending and the tax increases it proposed to pay for these spending measures. The Republican-controlled House of Representatives rejected the measure upon introduction and never scheduled a vote to consider the bill on the full House floor.

ABOUT THE PLAN

In mid-September, the president presented Congress and the American people with his plan to help create jobs for American workers. The American Jobs Act was a combination of spending on public-sector initiatives such as building infrastructure and hiring teachers and first responders, along with tax cuts. A third of the $447 billion proposal would have provided direct support to state and local governments, with nearly $50 billion directed at improvements to the country's transportation infrastructure.

The proposal called for spending $30 billion to rehire or prevent layoffs of up to 280,000 teachers, and another $5 billion for police officers, firefighters, and other emergency workers. An additional $15 billion would be allocated to revitalizing vacant and foreclosed properties to put people to work and increase property values in blighted neighborhoods.

Also notable for state and local governments, the legislation would have provided for an additional one-year delay of the implementation of the 3 percent withholding requirement, to January 1, 2014. The Government Finance Officers Association (GFOA) has advocated for a full repeal of this costly unfunded mandate, which would require the federal government, all states, and those local governments that spend more than $100 million a year on goods and services to withhold 3 percent of all payments made to vendors and remit that 3 percent to the IRS. The House of Representatives will likely be taking up legislation this fall (H.R. 674) to fully repeal the law. Similar legislation is pending in the Senate (S. 89 and S. 164).

The president also proposed enlarging and extending the Social Security payroll tax deduction for employees, including those in the public sector who contribute to Social Security, through 2012. Employees would have paid half the 6.2 percent rate, or 3.1 percent of their wages. Private-sector employers would...