This week, President Obama signed into law a $17.6 billion jobs creation package passed by Congress, H.R. 2847, the Hiring Incentives to Restore Employment Act ("HIRE Act"). This legislation includes incentives for businesses to hire the unemployed; extension of infrastructure programs affecting surface transportation, energy, and school construction projects; and continuation of depreciation programs in effect for small businesses. We note that this legislation, when first taken up and passed by the House of Representatives in December 2009, was a much broader measure that included: tax credits for businesses for hiring the unemployed, as well as other credits directed at small businesses; extension of assistance to help to pay COBRA healthcare premiums; and funding for new infrastructure and clean energy programs, among other items. Senate Majority Leader Reid (D-NV), recognizing he did not have the votes to support such a measure at the time, instead wrote a smaller bill. That does not mean, however, that Congress will not consider additional measures to address the nation's economic woes. Legislation is already under consideration, for example, to 1) either provide additional tax incentives for businesses or extend expiring ones; 2) extend unemployment insurance and provide health insurance subsidies for the long-term unemployed; and 3) provide additional funding for infrastructure programs. All of this is being done against a background of continued economic concerns and a Congress where many members are facing difficult re-election races in the fall. As a result, an environment exists to pursue lobbying opportunities in these areas for the remainder of the 111th Congress. The Public Policy & Infrastructure Practice remains available to help you and your clients develop a strategy to maximize the potential for success.

The HIRE Act

The HIRE Act has five key elements –

• Payroll tax holiday. The HIRE Act exempts employers from the employer's share of Social Security payroll taxes (normally 6.2 percent) in 2010 for any employee hired after February 3, 2010 and before January 1, 2011 who (1) swears under oath that he or she did not work more than 40 hours during the last 60 days, and (2) does not replace another employee of the employer, except one who voluntarily resigned or was terminated for cause.
• Tax credit for retaining employees. The Act offers a tax credit to businesses who keep a newly hired employee for at least 52 consecutive weeks, so long as the employee's wages during the last 26 weeks of that period are at least 80 percent of his or her wages during the first 26 weeks of the period. The credit is equal to the lesser of $1,000 or 6.2 percent of the employee's wages during the 52-week period.
• An extension of the highway trust fund, which has temporarily expired due to congressional inaction on re-authorization of the long term transportation funding measure known as SAFETEA-LU. Congressional inaction on SAFETEA-LU, which provides formulas for states to receive highway and mass-transit funding, resulted in many highway and mass transit projects throughout the country being temporarily put on hold. Under the HIRE Act, Congress has extended the existing formulas to December 31, 2010 without any changes to them and without any funding earmarked for specific projects.
• The expansion of the Build America Bond program, which finances infrastructure projects around the country by allowing state and local governments to borrow at lower costs. Under the HIRE Act, the Build American Bond model would now be available to issuers of existing Tax Credit Bonds, allowing them to elect to treat those bonds issued after the date of enactment as Build America Bonds, thus qualifying for the same direct subsidy that state and local governments receive. As a result, issuers of renewable energy, energy conservation, and school construction bonds (among others) receive credits for the interest paid under federal taxes. The federal subsidy for these bonds will be 45 percent of the borrowing cost (65 percent for certain small issuers).
• Increases in the expensing of depreciable business assets. Under the HIRE ACT, small businesses would have through 2010 to deduct $250,000 of depreciable asset purchases made in prior years.

Additional incentives to spur job creation are expected to be taken up in both the House of Representatives and the Senate as early as this week.

With the HIRE Act enacted into law, we anticipate the House of Representatives and the Senate to next consider, as soon as this week, additional measures to address the nation's economic woes.

This could include –

• Extending unemployment insurance benefits for many long-term unemployed, which are now set to expire on April 5. On March 10, the Senate passed H.R. 4213, the American Workers, State, and Business Relief Act of 2010 ("American Workers Act"), which would extend such benefits through December 31. If, as expected, the House and Senate are able to work out differences between their versions of the bill, the President is expected to sign it.
• Continuing the 65 percent subsidy of COBRA health premiums for those who have lost their jobs, available for up to 15 months, which has been repeatedly extended, most recently to cover those who are involuntarily terminated through March 31. The American Workers Act would make the subsidy available to those who are involuntarily terminated through the end of this year.
• Additional tax breaks for businesses, especially small business.

Summary. Jobs, Jobs, Jobs: A fertile ground for lobbying opportunities

At this point, it is not a question of whether additional jobs-related bills pass Congress and get enacted into law, but rather, which ones will. Both Congress and the Obama Administration are feeling the pressure to address the nation's economic troubles and, once the long battle to pass healthcare legislation ends, we expect the focus for the remainder of the year to be job creation. The Public Policy & Infrastructure Practice will continue to monitor congressional action in this area. We urge you to consider the opportunities that may be available for your clients, both in the implementation of the HIRE legislation and in anticipated new legislative initiatives.