Business

US jobs plan: Senate blocks key proposal

President Barack Obama
Image caption President Obama has been campaigning hard for his jobs bill

The US Senate has blocked a key piece of President Barack Obama's jobs bill that would have imposed higher taxes on the rich to help create jobs for teachers, police and emergency workers.

Senators voted 50-50 on the legislation, 10 short of the 60 votes needed to allow debate on the measure.

The proposal is part of Mr Obama's $447bn (£283bn) package designed to kickstart the flagging US economy.

The plan also failed in the Senate and is now being proposed piece-by-piece.

The president has been on the road regularly in recent weeks pushing his plan, but Republicans remain opposed.

"For the second time in two weeks, every single Republican in the United States Senate has chosen to obstruct a bill that would create jobs and get our economy going again," Mr Obama said in a statement, describing their position as "unacceptable".

He said he would continue to work with Congress to reintroduce pieces of the defeated bill.

Also in Congress, lawmakers also failed to push through a motion to repeal a tax-withholding law.

Senators voted 57-43 in favour of the proposal to scrap a law allowing the government to withhold 3% of payments to contractors - again, short of the 60 votes required.

'Protecting millionaires'

The first vote put paid to the Democrat plan to support 400,000 jobs by raising $35bn through increased taxes.

It was the first individual piece of Mr Obama's wider American Jobs Act to arrive on the Senate floor. Last week Democrats also failed to muster the 60 votes necessary to begin debate on that proposal.

Under Senate rules 51 votes, a simple majority, are needed to pass most legislation, but 60 votes - a so-called supermajority - are required to break a filibuster.

The failure to pass the proposal highlights the increasing antagonism between Democrats and Republicans, observers say.

Republicans are resolutely opposed to Mr Obama's jobs plan and have vowed not to allow it to pass Senate - the one chamber of Congress in which Democrats have a majority.

"Protecting millionaires and defeating President Obama are more important to my Republican colleagues than creating jobs and getting our economy back on track," said Democratic Senate Leader Harry Reid.

But Republicans said raising taxes was not the way to create jobs and stimulate growth.

"The fact is we're not going to get this economy going again by growing the government. It's the private sector that's ultimately going to drive this recovery," said Republican Mitch McConnell.

Other parts of Mr Obama's jobs bill, which includes investment in infrastructure projects, extending benefits for long-term unemployed, tax breaks for firms taking on new workers and measures to broaden home ownership, have yet to be voted on.

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