WASHINGTON – The Obama administration is open to a bipartisan congressional proposal for a payroll tax holiday for employers who hire people who have been out of work for some time, a top White House aide said.
"We are receptive to that idea," David Axelrod, President Barack Obama's senior adviser, told C-SPAN in an interview to air on Sunday, when asked about a joint proposal by New York Democratic Senator Charles Schumer and Utah Republican Senator Orrin Hatch.
With Americans increasingly anxious about persistently high unemployment, Obama has declared job creation his top priority. The Senate begins debate next week on a series of bills to boost employment.
Schumer and Hatch have proposed a payroll tax break for any business that hires someone unemployed for at least two months. In a January 26 New York Times opinion piece, they proposed every employer who hires such a worker be forgiven from paying the 6.2 percent Social Security payroll tax on that employee for the rest of 2010.
The idea differs from a proposal considered last year by the Obama administration that would grant companies tax credits, to be obtained after hiring.
"Unlike a jobs tax credit of a specific dollar amount, this credit is 'front-loaded' in that it provides an incentive for businesses to hire workers earlier in the year, because the tax benefit will be greater," the senators wrote.
The tax credit idea was criticized as being hard to administer and difficult to determine whether companies would have done the hiring without the benefit.
The senators called on other lawmakers and Obama to embrace the idea, which is in its early stages with no legislative text yet.
U.S. unemployment dipped to 9.7 percent in January, the lowest reading since September 2009, but the economy still shed another 20,000 jobs, and Obama said the trend was encouraging but not a cause for celebration.
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