NEW YORK (CNNMoney.com) -- Senate Democrats' draft plan for job creation, circulated Tuesday, contains a couple of employment measures and a lot of leftover business.
What's not included in the $85 billion draft legislation is additional funds for states or stimulus money for infrastructure, which Republicans have said they will not support.
President Obama met with Senate and House leaders on both sides of the aisle Tuesday to push for a jobs proposal. The House passed a $154 billion bill in December, but momentum has stalled in the Senate, where Democrats recently lost their 60-vote filibuster-proof edge.
While Senate Majority Leader Harry Reid, D-Nev., said lawmakers need to pass a jobs bill this week, Republicans were not so sure. Senate Minority Leader Mitch McConnell, R-Ky., said GOP lawmakers need to know more about the package.
"My members need to be able to feel like they understand what they are being called upon to support," McConnell said.
The Republican leader, meanwhile, said he'd like to explore a competing vision for job creation that centers around international trade and clean energy.
The central feature of the 362-page bill is a payroll tax credit for businesses who hire and retain the unemployed. The measure, crafted by Sen. Charles Schumer, D-N.Y., and Sen. Orrin Hatch, R-Utah, spares businesses from paying Social Security taxes on new hires who had been unemployed for at least 60 days. The proposal is expected to garner bipartisan support.
The legislation would also extend the deadline to file for federal unemployment benefits and the 65% Cobra health insurance subsidy to May 31. They currently expire a month's end.
Without an extension, nearly 1.2 million workers will become ineligible for federal unemployment benefits in March, according to the National Employment Law Project.
The bill would also extend two stimulus provisions: A small business loan guarantee and the Build America Bonds program, which helps states and municipalities fund capital construction projects.
Federal funding for highways would also be extended. Contractors and some lawmakers have been pushing to reauthorize the six-year $286 billion federal transportation funding act, which expired at the end of September. They say this is more crucial to job creation than an additional shot of infrastructure spending.
The rest of the bill, however, covers business the Senate didn't address last year. It includes measures such as extending five dozen expiring tax provisions and credits, including allowing people to deduct state and local sales taxes from their federal income tax levy. It also extends many health care and Medicare provisions.
Also included are measures affecting satellite television, taxes on foreign accounts, and pension funding.
The Senate bill does not contain any assistance for states, which are facing massive budget deficits and looking to Washington for help.
Without more federal assistance, states may have to take drastic actions to close an estimated $180 billion budget gap for fiscal 2011, which starts July 1 for most states. These moves could cost the economy 900,000 jobs, according to the Center on Budget and Policy Priorities.
The House bill would take $27 billion in TARP bank bailout funds to the states to prevent them from laying off teachers, police officers and firefighters.
Also missing is extra money for infrastructure projects. The House bill would pump more than $35 billion in TARP funds into highways and mass transit, as well as $2 billion for clean water projects and another $2 billion for the building and repair of affordable rental homes and public housing. The rest of the infrastructure funds would be spent on school construction and repair.
Republicans, however, have said they oppose shifting TARP money to job creation. They also have said they don't think infrastructure spending creates jobs, in direct contrast to congressional Democrats and the White House.
One sticking point for the GOP could be that the bill does not address the estate tax, which expired this year but will return in 2011. The two sides can't agree on where to set the tax and some Republican leaders want assurances from the Democrats that this will be resolved soon.
While Reid last week said he wanted lawmakers to vote on a bill on Monday, a blizzard wreaked those plans. Another snowstorm on Wednesday is likely to delay the bill's progression again. Lawmakers take a week-long break for Presidents Day after Friday.
Kyle Bass is the founder and chief investment officer of Hayman Capital Management. More
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