Compliance February 12, 2010

Reid Splits HIRE Bill into Pieces

February 12, 2010 (PLANSPONSOR.com) - Senate Majority Leader Harry Reid (D-Nevada) has chopped in half a broad package of business incentives and aid for the jobless that included pension funding relief and a COBRA health subsidy extension.

Reported by

Fred Schneyer

A Washington Post report said Reid will bring to the Senate floor February 22 the jobs-related portions of the Hiring Incentives to Restore Employment (HIRE) Act that was negotiated between Senators Max Baucus (D-Nevada) and Charles E. Grassley (R-Iowa), the leader and ranking Republican on the Senate Finance Committee, respectively (see Senate Jobs Bill Includes Pension Relief, COBRA Extension).

“We feel that the American people need a message,” Reid told reporters, according to the Post. “The message that they need is that we’re doing something about jobs.”

The remainder of the Baucus-Grassley bill, including an extension of the 65% COBRA premium subsidy to May 31, 2010, will be presented to the Senate on a later as-yet unspecified date, according to the Post report.

The centerpiece of the streamlined Senate jobs package would exempt companies from paying Social Security taxes for the remainder of 2010 on every new worker who had been unemployed for at least 60 days prior, the Post said. The proposal is popular among many lawmakers but has also sparked controversy about whether its estimated $13-billion cost over 10 years will be worth it in terms of the jobs it creates.

Senior Democratic aides said Reid made the move to quell squabbling among Democrats about the contents of the larger bill amid rising criticism that the legislation included too many special-interest perks, the Post said.

One employer trade group issued a statement of protest about Reid’s move, saying the need was too great to have the funding relief unduly delayed.

“The failure to include pension funding relief in the jobs bill is both disappointing and short sighted,” said President Mark Ugoretz of the ERISA Industry Comittee. “With broad bipartisan support and a direct impact on jobs, funding relief is an obvious winner, particularly if you are looking for more investment to spur economic growth and at no cost to taxpayers. Employers are not asking for a financial bailout or to be relieved of their pension obligations – only for more time to meet the pension funding increases that resulted from the recession. Most employers were well on their way to meet the increased funding demands of the 2006 Pension Protection Act when they got slammed by the market fallout in 2008.”