Jobs Act: From 'Pass This Bill' to 'Pass Part of This Bill'

Shot down in the Senate, the legislation faces an uncertain future.

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The not-entirely-unexpected defeat of the American Jobs Act at the hands of Senate Republicans Tuesday has prompted many to wonder if the Obama administration's latest effort to revive the economy is dead in the water.

Not a chance, President Obama said Wednesday at a gathering of the American Latino Heritage Forum, pledging to continue pushing for action on the bill, even sacrificing parts of the plan to salvage proposals most likely to garner bipartisan support.

"We will not take no for an answer," the president said. "We will keep organizing and we will keep pressuring and we will keep voting until this Congress finally meets its responsibilities and actually does something to put people back to work and improve the economy."

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The current plan combines payroll tax cuts for workers and businesses and other tax breaks totaling about $270 billion with $175 billion in new federal spending on infrastructure projects such as roads and school repairs. The package also extends unemployment assistance and provides more funding to local governments to reduce layoffs of public employees. The plan would be paid for with a 5.6 percent surcharge on income exceeding $1 million—the primary stumbling block for the bill--expected to raise about $450 billion over a decade.

Democrats have not yet determined which portions of the defeated bill will be spun off as separate proposals, but voting on pieces of the bill could begin as early as this month, Senate Democratic aides told the New York Times.

[See how Obama, GOP are unable or unwilling to break jobs standoff.]

Here's a look at some proposals Democrats and Republicans might be able to agree on:

Tax cuts for businesses.

Who benefits: Employers, primarily those with payrolls below $5 million.

What they would get: The current provision cuts the payroll tax in half, to 3.1 percent for employers on the first $5 million in taxable wages they pay. Another piece extends a full payroll tax holiday—now 6.2 percent--for any growth in a firm's payroll up to $50 million above the previous year, whether from new hires or increased wages.

Prospects and potential impact: Business-friendly tax relief is instant common ground for the White House and GOP, and has broad appeal between parties. Even still, the thorn in everyone's side remains how to pay for the cuts, which total about $65 billion.

While the bill provides broad tax relief for all businesses, small businesses are the primary beneficiary. Supporters of the measure hope the tax breaks provide incentives for small businesses—which have created 98 percent of the 2 million jobs added since January 2010—to hire more and increase wages.

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Tax cuts for workers.

Who benefits: 160 million workers.

What they would get: The current provision would cut employees' payroll taxes in half in 2012, putting an extra $1,500 in the pockets of typical American households earning $50,000 a year.

Prospects and potential impact: Payroll taxes, paid by every U.S. worker, are scheduled to increase at the end of this year, which could add additional headwinds to the recovery. The tax cut would give typical families an extra $1,500 in 2012, hopefully encouraging Americans to spend more, boost consumer demand, and ultimately increase hiring.

The GOP loves tax cuts, but some House Republicans are critical of the temporary nature of the cuts and are concerned with how workers will cope when the tax rate reverts to its previous level in 2013. Another sticking point: the tab. The White House has estimated payroll tax cuts will cost $175 billion, ensuring a showdown at some point over additional spending cuts elsewhere.

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Extending unemployment aid.

Who benefits: 6 million unemployed Americans.

What they would get: $44 billion would be spent to extend federal unemployment insurance, with a previous extension set to expire at the end of this year.