WASHINGTON DIGEST: Senate approves tax credits for companies that hire vets

WASHINGTON -- The Senate voted last week to offer up to $9,600 in tax credits to companies that hire unemployed veterans. It was the first piece of President Barack Obama's jobs plan to win bi­partisan support.

Senators voted 94-1 for the legislation, which also called for stronger job counseling and training programs for soldiers preparing to leave the military.

The vote was cast the day before the Senate went into recess to participate in Veterans Day events back home. Some 850,000 veterans are out of work, including about 240,000 who served in Iraq and Afghanistan.

Sen. Jim DeMint, R-S.C., cast the dissenting vote. He said studies showed that earlier bids to offer companies tax credits to hire welfare recipients, inner-city youth and released felons did not work.

"I cannot support this tax credit because I do not believe the government should privilege one American over another when it comes to work," DeMint said.

Sens. Harry Reid, D-Nev., and Dean Heller, R-Nev., voted for the veterans jobs bill.

The veterans amendment was attached to a bill that would repeal a pending requirement for local, state and federal governments to withhold 3 percent of their payments to contractors until those companies file their tax returns.

The withholding law was intended to encourage companies to pay taxes. But businesses argued it would crimp their cash flow and make it harder to hire new employees.

The Senate repealed the withholding requirement by a unanimous vote.

Before final passage, Republicans failed to advance their own ideas on job creation.

The GOP approach, embodied in legislation submitted last month, includes freezing federal regulations, giving the president a line-item veto, repealing health care reform, simplifying the tax system and amending the Constitution to require a balanced budget.

"It is very important that the American people know there are different visions about how we would create jobs in this country," said Sen. Rand Paul, R-Ky.

Democrats in response have pointed to economic studies challenging how many jobs the Republican plan would create.

The GOP amendment was defeated, 40-56. Heller voted for it. Reid voted against it.

INTERNET RULES DEBATED

Senators debated federal rules for the Internet, voting along party lines to uphold regulations that would prohibit online service providers from charging extra for faster speeds or from discriminating among website customers.

Democrats prevailed in a procedural vote in defending the "net neutrality" regulations set last year by the Federal Communications Commission. The regulations also are being contested in court.

The fight pits Verizon, Comcast and other companies that provide Internet access against online companies such as Google, eBay, Facebook, Skype and Netflix.

Sen. Jay Rockefeller, D-W.Va., defended the net neutrality rules, saying they ensure the Internet remains "free and open" and prevents service providers from determining which web services get put in a "slow lane."

"I believe that the FCC's effort, along with ongoing oversight and enforcement, will protect consumers, and I believe it will provide companies with the certainty they need to make investments in our growing digital economy," he said.

Sen. Kay Bailey Hutchison, R-Texas, said the regulations were not needed. She said they tie the hands of Internet service providers to standards that the FCC failed to define clearly. She also predicted they will stifle investment and job growth in the industry.

"The rules impose 19th century-style monopoly regulations on the most competitive and important job-creating engine of the 21st century," Hutchison said. "The FCC's rules could severely jeopardize this industry's vast potential."

A motion to block the regulations failed in a 46-52 procedural vote. Reid voted to defend the net neutrality rules. Heller voted to block them.

CLEAN AIR REGULATION DEFENDED

The Senate defended a regulation aimed at limiting forms of air pollution. The Environmental Protection Agency rule requires coal plants in 27 states to reduce emissions that drift into neighboring states.

The Obama administration said the regulation would improve public health. Some utilities complained about the cost of compliance, and Sen. Rand Paul, R-Ky., called it a "job killing" rule.

A Paul resolution to roll back the regulation was defeated in a procedural vote, 41-56. Heller voted for the Paul resolution. Reid voted against it.

Contact Stephens Washington Bureau Chief Steve Tetreault at stetreault@stephensmedia.com or 202-783-1760.