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Bill To Tax Firms That Export Jobs Fails In Senate

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WASHINGTON — The Senate on Tuesday blocked tax legislation that would have punished U.S. firms that export jobs. But the political symbolism of trying to save American jobs, not passing a bill, was the Democrats' closing argument on the economy in the waning weeks of the congressional elections.

Republicans complained that the vote used a serious subject – economic recovery – to score points with voters five weeks before the balloting in which all 435 House seats, 37 Senate seats and the Democratic majority are on the line. The bill in question, Republicans said, would make U.S. companies less competitive.

"The liberal Senate leadership has brought forward a politically motivated bill that will never become law," said Sen. Orrin Hatch, R-Utah.

But majority Democrats, now without their original plan to close the campaign with a middle class tax cut, sought to convince voters that the bill showed off their commitment to supporting the nation's economic recovery.

"This is part of the continuing focus on jobs," Sen. Debbie Stabenow, D-Mich., told reporters.

The bill failed, 53-45, to attract the 60 votes required to advance. Four Democrats and one Independent joined Republicans to block its progress.

But debating it and forcing senators on the record was the Democrats' point.

"We're just a few weeks away from an election," said Sen. Dick Durbin, D-Ill. "I wish this election would be a simple referendum on the debate we're having on the floor of the Senate right now."

The bill at issue in the Senate would exempt companies that import jobs from paying the 6.2 percent Social Security payroll tax for new U.S. employees who replace overseas workers who had been doing similar work.

The two-year exemption would be available for workers hired over the next three years. The tax cut – estimated to cost about $1 billion – would be partially offset by tax increases on companies that move jobs overseas.

The bill would prohibit firms from taking deductions for business expenses associated with expanding operations in other countries. It would increase taxes on U.S. companies that close domestic operations and expand foreign ones to import products to the U.S.

Republicans argued the tax cuts would be difficult to administer and the tax increases would hurt international corporations that employ U.S. workers.

"Let's have votes on real job creation incentives and let's get out of this gamesmanship," said Sen. Chuck Grassley of Iowa, the top Republican on the tax-writing Senate Finance Committee.

The tax increases total $369 million over the next decade, according to a preliminary estimate by the nonpartisan Joint Committee on Taxation. Combined with the tax cut, the bill would add an estimated $721 million to the budget deficit over the next decade.

The Democrats voting to block the bill were Sens. Max Baucus of Montana, Ben Nelson of Nebraska, Jon Tester of Montana and Mark Warner of Virginia. Also voting no was Sen. Joe Lieberman, I-Conn.

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