Senate Jobs Bill Includes Pension Relief, COBRA Extension

U.S. Senators Max Baucus (D-Montana) and Charles Grassley (R-Iowa) said in a statement that they are publicly releasing the text of the Hiring Incentives to Restore Employment (HIRE) Act to give committee members and the public an opportunity to study and comment on the measure.  Baucus chairs the panel while Grassley is the committee’s ranking Republican.

According to a statement posted on the committee’s Web site, highlights of the 361-page bill, worked out this week with the Obama Administration, include:

• A provision providing “temporary, targeted funding relief” for both single-employer and multiemployer pensions with a price tag of about $6 billion over 10 years.  The bill allows extended amortization of losses suffered in the recent market decline.
• An extension of jobless benefits and the 65% COBRA premium subsidy for terminated workers through May 31, 2010, with a $3-billion estimated cost over 10 years.
• An exemption from Social Security payroll taxes for every worker hired in 2010 who has been unemployed for at least two months.  The maximum value would be equal to 6.2% of wages up to the FICA wage cap of $106,800.
• An additional $1,000 income tax credit for every new employee retained for 52 weeks with employers able to claim the credit on their 2011 income tax return. That proposal could cost $13 billion over 10 years.

Baucus and Grassley said in a committee statement that they hope lawmakers will be able to consider the bill quickly. “Consistent with maintaining the spirit of bipartisanship, we believe that the appropriate timing and process will balance the goals of transparency with a desire to move expeditiously,” the lawmakers said. “Any efforts that needlessly rush the process through partisan means will undermine our goal of a bipartisan and transparent Senate legislative product.”

One employer trade group released a statement applauding the bill’s release. “The unprecedented ‘perfect storm’ of depressed financial markets, low interest rates and new pension funding rules has artificially inflated companies’ defined benefit pension obligations,” said American Benefits Council President James A. Klein. “Millions of dollars, normally earmarked for job creation and capital investment, are now being diverted into already healthy pension funds. This relief would allow employers to maintain their workforces while the economy recovers.”

The draft bill is available here.