Veterans Benefits Gain Support for Contractor Repeal Bill

Democrats in the U.S. Senate are poised to support the repeal of a 3 percent withholding requirement for government contractors if the chamber adopts an amendment encouraging companies to hire veterans.

The veterans amendment announced this morning by Democratic Senators Patty Murray of Washington, Debbie Stabenow of Michigan and Jon Tester of Montana would provide job training for unemployed veterans.

That is essentially the sweetener Democrats are seeking in exchange for their support of a House-passed bill that would repeal the contractors withholding requirement and pay for it by changing provisions of the 2010 health-care law.

“We expect it to pass,” Stabenow told reporters today. “This is something that is bipartisan.”

The Senate is scheduled to hold a procedural vote on Nov. 7 on the withholding repeal. If the chamber passes the repeal legislation with the veterans’ measure attached, it would go back to the House for another vote.

Similar Measures

The House has passed similar provisions, including on Oct. 12 in a 418-6 vote to support a veterans’ jobs bill.

The House isn’t scheduled to be in session next week. On Oct. 27, it passed a version of the withholding repeal, 405-16.

The sticking point on the contractor measure, which has wide support for repeal, has been how to make up $11 billion in forgone revenue to the Treasury over 10 years that would result.

The House would offset the repeal’s cost by including the nontaxable portion of Social Security benefits in the definition of income used to calculate eligibility for government health- care programs. That change would move some people from Medicaid into subsidized coverage in new health-insurance exchanges and would push others out of subsidized coverage.

House and Senate Democrats had objected to that approach. Senate Majority Leader Harry Reid, a Nevada Democrat, has said he would prefer to offset the contractor withholding repeal through new taxes on corporate jets and curbs on credits that can be claimed by companies that pay taxes to other countries.

The withholding repeal bill is HR 674.

To contact the reporter on this story: Steven Sloan in Washington at ssloan7@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

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