By Larry Jones
March 22, 2010

President Barack Obama signed into law the Hiring Incentives to Restore Employment (HIRE) Act, H.R. 2847, during a White House Rose Garden ceremony on March 18. This legislation will provide tax breaks to employers who hire new workers, create Build America Bond-like programs to generate more infrastructure jobs, and extend the higher expensing limits on deductions for capital improvements made by small businesses. The Act also extends the Surface Transportation Act through December 31 to continue funding for existing transportation infrastructure jobs.

This is just one of several job bills on the Democrats Jobs Agenda that Congress plans to pass to generate more jobs. The Conference of Mayors continues to work with House Education and Labor Committee Chairman George Miller to urge support for the Local Jobs for America Act, H.R. 4812, which would provide direct assistance to local governments to help them avoid further layoffs and hire new workers to help put America back to work.

Before signing the legislation, the President provided brief remarks to an audience comprised of members of Congress, and representatives from the small business community, state and local governments, community-based organizations, and civil rights groups. He said, "A consensus is forming that, partly because of the necessary—and often unpopular—measures we took the past year, our economy is now growing again and we may soon be adding jobs instead of losing them. The jobs bill I’m signing today is intended to help accelerate that process." He then added, "Now make no mistake. While this jobs bill is absolutely necessary, it’s by no means enough. There’s a lot more that we’re going to need to do to spur hiring in the private sector and bring about full economic recovery."

Under the new law, employers in the private sector will receive an exemption from the Social Security payroll tax for every person hired between February 3, 2010 and January 1, 2011, provided the person has been unemployed for at least 60 days. Employers can also receive an additional income tax credit up to $1000 for every new hire retained for 52 weeks.

The legislation also creates a Build America Bond-like program that covers tax credit bonds such as those used for school construction and energy related projects. Under the program, the Treasurer would make direct payments to issuers of qualified school construction bonds, qualified zone academy bonds, new clean renewable energy bonds and qualified energy conservation bonds in amounts that would have been provided for tax credit bonds.

To assist small businesses, the new law will continue to allow them to deduct up to $250,000 from their taxable income for capital investments such as the purchase of new equipment through the end of 2010. Without this provision, small businesses would only be allowed to deduct up to $125,000 for these investments.