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Dems Jettison Millionaire Surtax in New Jobs Bill

Senate Democrats plan to make veterans the focus of their next jobs bill, providing tax incentives for businesses to hire former members of the military and instructing the Labor Department to find ways to ease their transition to the civilian workplace.

But perhaps most striking is Democrats' decision to jettison a popular method of paying for pieces of President Obama's $447 billion jobs bill, which failed in a bipartisan vote in the Senate. The majority is not looking to tax Americans who make more than $1 million to offset the veterans' jobs provision; rather, they will keep in place current fees for V.A. home loans.

The abandonment of the millionaire surtax is a victory for Republicans, who have, heretofore opposed such a measure, and it also signals a significant compromise by Democrats toward improving the nation's persistently poor jobless rate. While polls showed the surtax to be popular with a majority of Americans, Republicans have stood uniformly against it, thereby blocking any possible jobs measure.

"No veteran should stand at the back of any line, and certainly not an employment line," Sen. Debbie Stabenow, D-Mich., told reporters on a conference call Friday.

"For too long in this country we have patted our veterans on the back for their service and then pushed them out into the job market alone," said Senate Veterans' Affairs Committee Chairwoman Patty Murray of Washington, lead sponsor of the bill. "With this bill we are giving our veterans the job skills to get their foot in the door and incentivizing employers to make sure that door is open to them."

The bill provides a tax credit of up to $5,600 to businesses for hiring veterans who have been looking for a job for more than six months, as well as a $2,400 credit for those who are unemployed for less than 6 months. For those who hire veterans who have been disabled in the line of duty, a tax credit of up to $9,600 is available, as long as the vet has been looking for work for more than six months.

Democrats plan to try to attach the amendment to a popular House-passed bill that repeals a 3% withholding tax set to hit federal and state contractors in 2013 on all payments to them over $10,000.

A procedural vote is set for Monday night to start debate on the legislation.