Politics in Action: S. 1723 and S. 1726

STATEMENT OF ADMINISTRATION POLICY

S. 1723 – Teachers and First Responders Back to Work Act of 2011

(Senator Menendez, D-New Jersey, and 9 cosponsors)

The Administration strongly supports passage of the Teachers and First Responders Back to Work Act, which will keep teachers in the classroom, police on the beat, and firefighters at work. The President sent these proposals to the Congress as part of the American Jobs Act and as a way to save jobs and get the economy growing again.

Although the recession officially ended in June 2009, declining revenues and the tapering of support from the Recovery Act meant budget cuts and hundreds of thousands of layoffs at the State and local levels.

Additionally, in the coming school year, many school districts will have to make another round of difficult decisions that will cost jobs and put the education of the Nation's children at risk.

S. 1723 provides States with $30 billion in relief to support almost 400,000 educator jobs nationwide next year – stopping as many as 280,000 teachers from being laid off and allowing school districts to go beyond that to rehire teachers or add new ones.

S. 1723 also provides $5 billion to support the hiring and retention of public safety and first responder personnel. By supporting such jobs, the plan aims to keep communities safe from crime and able to maintain critical emergency response capabilities.

S. 1723 is fully paid for through a surtax on those Americans making over $1 million per year. What is most important is putting Americans back to work right now and making sure the debt is not increased over time – and doing so in a way that is fair. S. 1723 meets that test.

By enacting S. 1723, the Congress and the President can work together to save jobs, protect children's education, and keep communities safe. The Administration urges prompt and favorable action.

S. 1726 – Withholding Tax Relief Act of 2011

(Sen. McConnell, R-Kentucky)

The Administration supports the intent of S. 1726 to repeal a three percent withholding on certain payments made to private contractors by Federal, State, and local government entities, but strongly objects to the bill’s rescission of appropriated discretionary funds to pay for the repeal.

The repeal of the withholding requirement in S. 1726 would reduce a burden on government contractors, who otherwise comply with their tax obligations, particularly small businesses. As most recently evidenced in the President’s proposed American Jobs Act, released September 12, 2011, the Administration has supported alleviating this burden, which was originally enacted into law on May 17, 2006.

The Administration also believes it is important to ensure that Federal contractors are compliant with tax laws and support more targeted efforts that prevent persons with outstanding tax debts from receiving Federal contracts.

The effect of the repeal of the withholding requirement would be to avoid a decrease in cashflow to these contractors, which would allow them to retain these funds and use them to create jobs and pay suppliers. This would complement the Administration’s other efforts to help small businesses. As well, this provision would reduce implementation costs borne by Federal and other governmental agencies.

However, the rescission of $30 billion of appropriated funds runs counter to the spirit of two recent bipartisan agreements, including the recently-enacted Budget Control Act of 2011 (BCA). That Act has instituted spending caps that will cut annual Government spending by about $1 trillion over the next ten years and, by the end of the decade, will bring discretionary spending to its lowest level as a share of the economy since the Eisenhower Administration.

Disregarding the BCA agreement and cutting already-tight discretionary program levels even further, as this bill would do, would be a serious mistake. The bill’s unspecified rescission of $30 billion in appropriated funds would cause serious disruption in a range of services supported by the Federal Government. To further address the need to reduce the Federal deficit, the President has offered a detailed blueprint for more than $3 trillion in additional deficit reduction.

The Administration is committed to working with the Congress on a balanced approach to deficit reduction and is willing to work with the Senate to identify acceptable offsets for the budgetary costs associated with the repeal in S. 1726, including but not limited to ones that are in the President’s detailed blueprint.

If S. 1726 is presented to the President with the current offset, his senior advisors would recommend that he veto the bill.

Firefighter image courtesy of http://clipart-for-free.blogspot.com.

Internal Revenue Service image courtesy of U.S. Government
(Public Domain)