WASHINGTON — The U.S. Senate failed to advance legislation that would create tax breaks for companies that move foreign-based jobs to the U.S. and penalize those that send jobs offshore.
The 53-45 vote was short of the 60 needed to move the measure forward. Four Democrats and independent Joe Lieberman of Connecticut voted with 40 Republicans against allowing formal consideration of the bill.
The offshore-jobs legislation would waive for two years the 6.2 percent payroll tax for employees hired by U.S.-based companies to replace workers who performed the same job overseas. That would save companies about $1 billion in taxes over the next three fiscal years, according to the Joint Committee on Taxation.
The bill would deny deductions and tax credits for expenses related to transferring an existing U.S. job abroad.
It also would raise taxes on income created by foreign labor that replaced U.S. jobs.
Democrats said Republicans were obstructing efforts to combat outsourcing of U.S. jobs.
Republicans said the bill would hurt the U.S. economy and accused Democrats of trying to change the subject from the majority party’s decision to wait until after the election to vote on preventing income-tax increases set to take effect Jan. 1.
“We want to export products, not jobs,” Sen. Debbie Stabenow, a Michigan Democrat and one of the bill’s sponsors, said during floor debate Tuesday. “For me, this is a fight about whether or not we’re going to make things in America.”
The Senate Democrats voting against the bill’s advancement were Max Baucus and Jon Tester of Montana, Mark Warner of Virginia, and Ben Nelson of Nebraska. Lieberman, who also voted no, caucuses with Democrats.
Sen. Charles Schumer, a New York Democrat and a sponsor of the bill, told reporters last week the measure would use a “carrot and a stick” to keep jobs from being moved overseas.
Senate Republicans and business groups, including the U.S. Chamber of Commerce, said the tax increases would make it harder for U.S. companies to compete globally and would ultimately undercut efforts to create jobs in this country.
Iowa Sen. Charles Grassley, the top Republican on the Senate Finance Committee, said tax increases on products manufactured in foreign countries by U.S.-based companies and sold back to U.S. consumers, would hurt companies’ ability to compete with foreign rivals.
“We’re going to lose business and lose jobs in the process,” Grassley said.
Meanwhile, a stopgap spending bill that’s needed to avert a government shutdown on Friday advanced in the Senate as lawmakers prepared to head for the exits for the midterm elections.
The measure easily advanced, 83-15, Tuesday on a procedural vote that puts it on track to pass the Senate today, and the House could clear it for President Barack Obama before the budget year ends at midnight Thursday.
To speed the measure through, lawmakers ignored administration pleas for add ons such as $1.9 billion for “Race to the Top” grants to better-performing schools and more than $4 billion to finance settlements of longstanding lawsuits by black farmers and American Indians against the government.
The measure would fund the government at current levels until early December, with only a few exceptions, such as funding to make sure there’s no cutback in the number of flights protected by federal air marshals or cuts in the number of border patrol agents along the U.S.-Mexico border. There’s also money for increased oil rig inspections in the Gulf of Mexico.
Information for this article was contributed by Ryan J. Donmoyer of The Associated Press and by Andrew Taylor and Ben Evans of The Associated Press.
Front Section, Pages 2 on 09/29/2010