House Passes Small Element of American Jobs Act

Measure eliminates a yet-to-be enacted law.

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WASHINGTON (Reuters) — The Republican-led House of Representatives passed a minor element of President Barack Obama's jobs bill on Thursday as consensus remained elusive on other efforts to boost the struggling U.S. economy.

With the unemployment rate stuck at 9 percent, Republicans and Democrats have lined up behind sharply different job-creation agendas.

Neither agenda is likely to become law. But both will have a long afterlife in the 2012 presidential and congressional elections as both parties seek to convince voters that they have a better plan to create jobs.

Thursday's vote was a rare example of common ground as the House voted 406 to 16 to eliminate a yet-to-be enacted law that would withhold 3 percent of payments to government contractors. The Senate is expected to pass the measure next week.

[Check out our editorial cartoons on President Obama.]

It could be one of the few elements of Obama's $447 billion job-creation package to pass Congress. Republicans oppose several of the bill's direct-spending measures and have so far declined to say whether they would back the tax cuts for workers that make up the bulk of the bill.

Republicans are advancing a rival agenda of their own, centered around expanding domestic oil and gas drilling and relaxing pollution controls and other business regulations.

Obama has touted his jobs plan in campaign-style rallies across the country, even though Republicans have already blocked it. Republicans, meanwhile, point out that the Democratic-led Senate has so far refused to take action on 15 of their job-creation bills that have passed the House.

The Senate has no plans to take up any of those bills, a Democratic aide said.

BOEHNER URGES SENATE ACTION

"We need the Senate to work with us and start taking action so we can help our economy get back to creating new jobs," House Speaker John Boehner said.

[See a collection of political cartoons on the economy.]

The Republican approach squares broadly with the concerns of small-business owners, who believe that complying with government regulations is their most important problem, according to a Gallup poll released on Monday.

According to analysis firm Macroeconomic Advisers, streamlining regulations would increase productivity over time but do little to boost the economy in the short term. The Obama plan, by contrast, would boost employment by 1.3 million jobs next year and have a dwindling effect after that.

"We view the two plans as more complementary in nature than competitive. If only Democrats and Republicans could see it that way, too!" the company wrote in a blog post.

The bill passed by the House on Thursday would repeal a 2006 law, enacted when Republicans controlled both chambers of Congress, that is meant to ensure that firms that do business with the government pay their fair share of taxes.

Business groups say the law, due to take effect in January 2013, unfairly punishes honest contractors and would force them to charge more to make up for the loss of cash flow and would cost more than it would save.