WASHINGTON BUREAU — Sen. Max Baucus and Sen. Charles Grassley have teamed up to unveil a jobs bill draft that would extend the COBRA subsidy program and ease some of the requirements imposed on pension plan sponsors.
Baucus, D-Mont., is the chairman of the Senate Finance Committee, and Grassley, R-Iowa, is the highest ranking Republican on the committee.
The Hiring Incentives to Restore Employment Act draft was developed as a result of talks earlier this week between representatives of Republican congressional leaders and President Barack Obama.
The drafters say their main goal is to encourage businesses to hire more workers.
The draft bill would:
- Create an exemption from Social Security payroll taxes for every worker hired in 2010 who has been unemployed for at least 60 days. The maximum value would be equal to 6.2% of wages up to the FICA wage cap of $106,800.
There also would be an additional $1,000 income tax credit for every new employee retained for 52 weeks. The credit could be taken on the employer's 2011 income tax return. That proposal could cost $13 billion over 10 years.
- Temporarily relax funding requirements for single-employer and multiemployer pension plans that were hurt by the 2008 market crash. That proposal could cost $6 billion over 10 years.
The American Benefits Council, Washington, is one of the groups that has been lobbying for those changes. "Pension funding relief is essential to the preservation of thousands of American jobs, so we are extremely pleased to see the inclusion of these provisions as part of the draft Senate jobs bill unveiled today," James Klein, president of the council, says in a statement.
- Extend increased unemployment benefits limits and the 65% COBRA health benefits continuation subsidy through May 31. Those extensions are now set to expire Feb. 28. That proposal could cost $3 billion over 10 years.
Other draft provisions could help Medicare Advantage plans that serve enrollees with special needs and help subsidize seniors' purchases of housing and Medicare Advantage plan coverage.
The draft would require the Centers for Medicare and Medicaid Services to make $8 billion cuts in a discretionary fund over 10 years. CMS officials wouldhave to use the money saved to improve the original Medicare fee-for-service program.
Officials at Washington Analysis, Washington, which advises institutional investors, says that, because of the President's Day recess, Congress is unlikely to act on the draft until the week after next week.
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