The latest jobs bill from Senate Democrats - a plan to punish firms that ship jobs overseas - failed to clear a key procedural hurdle Tuesday after even some Democrats complained that the measure would hamper the ability of U.S. companies to compete in foreign markets.
Four Democrats and Sen. Joseph I. Lieberman (I-Conn.) voted with a united Republican caucus to block the bill, which was crafted to address the 9.6 percent unemployment rate in the run-up to November's midterm elections. On a vote of 53 to 45, the measure failed to garner the 60 votes needed to overcome a GOP filibuster.
Senate Majority Leader Harry M. Reid (D-Nev.) defended the bill as a "simple, common-sense" effort to "keep American jobs here in America" and to "stop forcing taxpayers in Nevada and across the nation to pay for giveaways that reward companies for sending American jobs overseas."
But Senate Minority Leader Mitch McConnell (R-Ky.) dismissed the bill as "a purely political exercise" that never had a chance of becoming law.
"With just three days left in the Democrats' two-year experiment in expanded government, they want to make a good last impression with a bill that they know has no chance of passing and which they have no interest in passing," McConnell said. "In my view, it's an insult to the millions of Americans who want us to focus on jobs."
Senate Democrats cobbled the measure together last week as it became clear that they would have to abandon plans to extend Bush administration tax cuts for the middle class before the election. While some Democrats wanted to stage a pre-election battle over taxes, the 59-member caucus was deeply divided, with some conservatives echoing GOP arguments that tax cuts should also be preserved for the nation's wealthiest families, at least until the economy fully recovers.
Republicans want to extend all the cuts, which are due to expire in January, while President Obama wants to eliminate the cuts on income over $250,000 a year for families and $200,000 a year for individuals. Democrats hope to address the issue during a lame-duck session that will begin in mid-November.
Once the decision was made to delay the tax vote, Senate Democrats turned to the outsourcing issue, which they also viewed as politically potent, especially in devastated manufacturing communities in Midwest and East Coast industrial states.
The bill under consideration Tuesday would have ended tax deductions for expenses incurred when companies shutter U.S. operations and shift the work abroad; imposed a new tax on products once made in the United States but now manufactured by foreign workers; and offered employers a two-year payroll tax holiday on jobs repatriated from overseas.
The payroll tax break would have let employers keep about $1 billion over the next decade, according to the nonpartisan Joint Committee on Taxation, while the tax increases would have taken back about $300 billion over the same period.
Business groups strongly opposed the measure, and Republicans said the tax break would have been miniscule compared with the benefit of extending the Bush-era tax breaks.
"The best thing Congress can do for Americans right now is lower - not raise - the cost of creating good jobs," said Sen. Lamar Alexander (R-Tenn.). "This bill would raise taxes on the very job creators that we hope will hire out-of-work Americans, which makes no sense, especially in the middle of a recession."
Democrats voting to block the bill were Ben Nelson (Neb.), Jon Tester (Mont.), Mark Warner (Va.) and Max Baucus (Mont.). Baucus, chairman of the tax-writing Senate Finance Committee, complained last week that the measure would put the nation "at a competitive disadvantage."