President Barack Obama today signed into law a bill that would kill a withholding tax on government contractors even before it was levied for the first time.
President Barack Obama today signed into law a bill that would kill a withholding tax on government contractors even before it was levied for the first time.
The measure, which drew much more attention from Mr. Obama at today's White House ceremony for provisions that promote the hiring of veterans, nullifies a 3% withholding tax that was set to go into effect in 2013.
The tax, enacted in 2005 but delayed several times, would have been placed on vendors doing business with government at every level. The House and Senate approved the bill with little dissent.
The Financial Services Institute Inc. has been a strong proponent of the measure, arguing that it would ensure immediate full payments to investment advisers assisting governments with employee retirement plans and other investments.
“Businesses that provide services to the government deserve to be paid in full and due upon receipt,” FSI President Dale Brown said in a statement. “They shouldn't be forced to lose a percentage of their pay they could be investing throughout the year or using to hire additional employees. The withholding tax would have created cash flow problems, as well as drained capital that could have been used for job creation and business expansion.”
The bill became law on the same day that the Joint Select Committee on Deficit Reduction was expected to give up on trying to reach an agreement. The panel was supposed to offer a proposal by Nov. 23, under a bill passed in August that raised the debt ceiling.
Mr. Obama pointed to the legislation he enacted as an example of both parties coming together on economic policy.
“It is important to note that in addition to our veterans, there are millions of other Americans who are still looking for work right now,” Mr. Obama said at the signing ceremony. ”They deserve the same kind of bold, bipartisan action that we've seen here today. That's what people have sent us here to do. So my message to every member of Congress is: Keep going. Keep working. Keep finding more ways to put partisanship aside and put more Americans back to work.”
There have been few hopeful signs this year that that Congress has the ability to overcome its deep partisan divide to pass significant tax reform or jobs bills.
House Speaker John Boehner, R-Ohio, used the signing to promote other bills that the House has passed that await Senate action. The measures include one that would allow companies to raise capital on the Internet through so-called “crowd-funding.”
“I hope President Obama will build on the common ground that led to today's victory, work with Republicans, and urge Senate Democrats to take action on the rest of the still-delayed bipartisan House-passed jobs bills so we can get our economy back to creating new jobs,” Mr. Boehner said in a statement.
