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Washington, D.C. – The Senate majority's plan to create permanent jobs with temporary money suffers from a severe lack of accounting reality, according to U.S. Senator Mike Enzi, R-Wyo.

Senate Republicans were joined by Ben Nelson, D-Neb., Joe Lieberman, I-Conn., and Mark Pryor, D-Ark. in voting last night against Majority Leader Harry Reid, D-Nev.'s effort to pass new "stimulus" legislation that would encourage states to use federal money to hire teachers and other public sector workers. 

"This proposal is fundamentally flawed at many levels, but the most glaring flaw is that this is one-time money.  It makes no fiscal sense to create permanent jobs with temporary money.  It's unsustainable," Enzi said.  "The majority is digging us deeper in the same hole they put us in with the first so-called stimulus.  It didn't work then.  It won't work now.  It's a policy based on the false promise that we can spend, indebt and tax ourselves into prosperity.  Let's put down the shovel and stop piling taxes and regulations on businesses that actually do create jobs."

The Senate voted 50-50 for the plan, S. 1723.  Sixty votes were needed in order to move the legislation forward.

The Republican’s alternative to the “stimulus” legislation, the Withholding Tax Relief Act, would have repealed the 3% withholding tax provision that mandates federal, state, and local governments withhold 3% of nearly all of their contract payments, Medicare payments, farm payments, and certain grants for payments made after December 31, 2012.
            “We have to do better for our job creators.  This overly-broad provision is a lose-lose situation for both government and taxpayers in terms of cost and complexity.  Most contractors’ margins are already razor thin and this requirement makes a bad situation even worse by restricting cash flow needed for day-to-day operations and business investments.”      
           The mandate is intended to go after scoff-law government contractors who avoid paying taxes but instead would impose significant financial burdens on both the public and private sectors.  The Department of Defense estimated its costs to implement the provision would be $17 billion over the first five years.  The provision hurts honest taxpaying businesses while attempting to find tax delinquents by essentially forcing companies to provide the federal government with an interest-free loan.  The 3% withholding tax would significantly affect companies’ cash flows and inhibit their ability to expand their businesses and hire new workers.

            The Senate voted 57-43 to consider the repeal measure, S.1726.  Ten Democrats joined Senate Republicans in this vote.  The sixty vote threshold needed to move the legislation forward was not reached. 

                                                                                   

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